27.03.202609:17 Forex Analysis & Reviews: Gold Partially Recovers Losses

Today, during Asian trading, the price of gold partially recouped losses after US President Donald Trump once again postponed the deadline for active attacks on Iran's energy infrastructure, hoping to reach a ceasefire agreement regarding the war in the Middle East.

This move, made in the hope of achieving an agreement to de-escalate the conflict in the Middle East, introduced a temporary element of stabilization into the tense geopolitical situation. Gold, traditionally viewed as a safe haven during uncertainty, faced significant pressure yesterday as the risk of conflict escalation rose, which could drive inflation higher and prompt higher interest rates. Expectations of imminent military action against Iran pushed investors to seek other defensive assets, and gold was no longer as attractive. However, the American president's statement shifted sentiments, introducing a note of cautious optimism and reducing immediate worries about a full-scale military confrontation.

By mid-session today in Asia, gold prices reached around $4,450 per ounce, having dropped almost 3% in the previous session amid growing doubts about a potential ceasefire agreement.

Since the start of the war, which has lasted nearly a month, the price of gold has fallen by almost 17%, primarily moving in tandem with stocks and inversely to oil prices. The sharp increase in energy prices has heightened inflation risk and led investors to bet that central banks will keep interest rates unchanged or even raise them. This creates obstacles for non-yielding precious metals.

Additional downward pressure on prices has come from the fact that the Central Bank of Turkey sold and exchanged around 60 tons of gold, worth more than $8 billion, during the first two weeks of the war, leading to a sharp reduction in reserves. Increased purchases by central banks were one of the key factors contributing to the rise in gold prices over the past couple of years.

As for the current technical picture of gold, buyers need to reclaim the nearest resistance at $4,481. This will allow for targeting $4,531, above which breaking through will be quite problematic. The farthest target will be around $4,591. In the event of a decline in gold prices, bears will attempt to take control of $4,432. If they succeed, a breakout of this range will deliver a serious blow to bullish positions, pushing gold down to a low of $4,372 with the prospect of reaching $4,304.