Gold rebounds above $4,345 as ceasefire, weaker dollar fuel rally

Gold rebounded sharply as a weaker US dollar and falling bond yields offset fading safe-haven demand after the US-Iran ceasefire, with traders now turning to a packed week of central bank meetings.

Gold rose as much as 3 percent to $4,367.58 an ounce on COMEX on Monday, its biggest single-day gain in more than a month, before settling near $4,358.81 as of 10:19 a.m. ET. The rally followed two consecutive weeks of declines that pushed prices below $4,100, the lowest since November. The 24-hour low was $4,213.19, according to exchange data.

"The sharp decline in WTI reflects the rapid erosion of part of the geopolitical risk premium that had supported oil prices in recent months," said Antonio Di Giacomo, Senior Market Analyst at XS.com. The US dollar index fell 0.19 percent, while the 10-year Treasury yield dropped 3.1 basis points to 4.452 percent, creating a more supportive backdrop for bullion.

Gold had traded in an unusual pattern since the conflict began in late February, often moving inversely to crude oil because higher energy prices fed inflation fears and raised expectations that central banks would keep rates elevated. That dynamic reduced the appeal of gold, which does not pay interest. Bullion remains down about 18 percent since the conflict started and about 22 percent from its all-time high of $5,597.23 set on Jan. 29.

Resistance at $4,366–$4,450 Tests the Bearish Trend

From a technical perspective, gold's recovery back above the March low near $4,098 has improved the near-term picture, although more price action is needed to confirm the end of the bearish trend. The rally has carried prices toward a key resistance zone starting around $4,366 and stretching to $4,450, where the 21-day exponential moving average, the 200-day simple moving average, and a descending trendline converge.

A break above that zone would put the broader bearish structure that has dominated recent months under serious pressure. On the downside, initial support sits around $4,220, which previously acted as resistance. A move back below $4,098 would suggest the rebound was merely corrective and would increase the probability of a breakdown below the psychological $4,000 level.

Central Bank Meetings Take Center Stage

With geopolitical tensions cooling, the focus now shifts to a packed calendar of policy decisions from the Bank of Japan, the Federal Reserve and the Bank of England, alongside several other G10 central banks. The Fed meeting on Wednesday will be particularly important for gold. Markets expect policymakers to maintain a cautious tone, but any indication that the Fed is more concerned about inflation risks could help stabilize the US dollar and limit gold's upside.

Lower energy prices may ease pressure on other central banks, including the Bank of England, which faces a balancing act between slowing inflation and still-elevated wage growth. For gold traders, the reaction in bond yields and the US dollar following these meetings may prove more important than the policy decisions themselves.

Silver also rallied, climbing as much as 4.1 percent to trade near $70.60 an ounce, tracking gold's move higher. The gold-to-silver ratio narrowed to about 62, compared with a five-year average near 75, reflecting silver's outperformance during the rebound.

This article is for informational purposes only and does not constitute investment advice.