Gold prices stabilise as geopolitical tensions ease

Ceasefire Announcement

Major U.S. stock indices posted significant gains, while gold and oil prices declined after President Donald Trump announced a comprehensive ceasefire between Israel and Iran, following Iran’s attack on the Al Udeid Air Base in Qatar. The ceasefire is set to take effect on Tuesday at 8:00 a.m. UAE time. If both sides uphold the agreement, the war will be officially declared over 12 hours later.

Earlier this week, oil prices surged to multi-month highs, breaking above $80 per barrel amid fears that Iran might follow through on its threat to close the Strait of Hormuz—a critical maritime corridor for nearly 20% of global oil exports. Such a move could lead to a significant supply disruption, potentially driving oil prices above $100 and even toward $120 per barrel. However, prices have since retreated, falling below the $70 mark. Gold prices, meanwhile, saw only marginal gains and continue to hover around $3,350 per ounce.

Federal Reserve Chairman’s Congressional Testimony

Markets are also closely watching the upcoming testimony by Federal Reserve Chairman Jerome Powell before the U.S. House of Representatives. Powell is expected to explain the rationale behind the Fed’s decision to resist pressure from President Trump to cut interest rates. The Fed continues to base its policy decisions on key economic indicators such as inflation and unemployment.

Officials have indicated that they need more time to assess how inflation is evolving following the imposition of tariffs—an evaluation that may extend into the fourth quarter of this year. As a result, a 25-basis-point rate cut is possible but not guaranteed at the September meeting, with future cuts depending largely on the performance of the U.S. labor market.

However, there is no clear consensus within the Federal Open Market Committee. While some members advocate waiting until the September meeting or after, others have downplayed the economic impact of tariffs and suggested that a rate cut could be appropriate as early as the July meeting.

Gold Faces Key Support Levels

Gold is approaching a test of its 50-day moving average for the first time since mid-May. Currently, the price is trading within a zone between $3,127 and $3,357 and appears to be heading toward the low end of this zone. For that to happen, gold would need to break below key support levels, including the ascending trendline that originated from the December 30 low and the support level at $3,245.

Upside Scenario Levels to Watch

Conversely, a daily close above $3,357 would signal renewed bullish momentum, potentially triggering a rally toward the $3,500 per ounce level. Notably, the bullish flag pattern signal remains intact, which suggests the possibility of a continuation toward the $3,900 level, as long as the price stays above the upper boundary of the flag.

Gold Daily Price Chart

Chart Source: ADSS Platform