Gold Prices Rebound as Dip Buying Emerges After Sharp Decline
Gold prices moved higher on Monday, supported by renewed buying interest as investors took advantage of lower prices following one of the steepest monthly declines in nearly two decades.
Spot gold rose 1.6% to $4,566.47 per ounce by 09:17 ET (13:17 GMT), while gold futures also gained 1.6% to $4,596.15 per ounce. Despite the rebound, gold remains down more than 14% over the past month, after briefly falling to $4,000/oz last week before recovering toward the $4,500 level.
Precious Metals Follow Gold Higher
Other precious metals also posted gains. Spot silver climbed 1.9% to $71.14 per ounce, while platinum advanced 2.6% to $1,914.84 per ounce, reflecting broader strength across the metals market.
Technical Rebound Signals Easing Bearish Momentum
According to OCBC analysts, gold’s recent recovery appears largely technical. The sharp sell-off since the start of the Iran conflict in late February pushed indicators such as the relative strength index (RSI) into oversold territory, prompting a short-term rebound.
While bearish momentum is beginning to ease, analysts caution that the recovery may not yet be sustainable without stronger fundamental support.
Key Resistance Levels to Watch
For gold to establish a more durable recovery, prices will need to break above key resistance levels at $4,624, $4,670, and $4,850 per ounce.
Failure to move above these levels could result in continued weakness, with gold potentially trading in a softer range in the near term.
Rising Yields and Rate Outlook Weigh on Gold
Elevated energy prices are increasing inflation risks, which in turn could push bond yields higher. This creates a challenging environment for gold, as the metal typically underperforms when interest rates rise.
At the same time, expectations for central bank rate cuts have weakened, while the possibility of rate hikes has gained traction. This shift further reduces the appeal of non-yielding assets like gold.
Iran Conflict Adds Uncertainty to Market Outlook
Geopolitical risks remain a key factor influencing gold prices. Markets are closely monitoring the Iran conflict, particularly after Iran-backed Houthi forces launched attacks on Israel over the weekend, raising concerns about a broader regional escalation.
Iran has also indicated readiness for a potential U.S. ground invasion, following reports of increased American troop deployments in the Middle East.
Trump Signals Progress but Warns of Escalation
President Donald Trump stated that progress has been made in negotiations to end the conflict, but warned that military action against Iran’s energy infrastructure remains possible if talks fail.
He previously extended a deadline for potential strikes on Iran’s energy facilities to April 6, while Iran continues to reject the possibility of direct negotiations with the United States.
