Gold Weekly Outlook: Geopolitics and Oil Prices Hold the Key for Next Move

Gold rose about 4% over the week, even though it dropped around 1.7% on Friday. The outlook now depends heavily on developments in the Iran conflict, especially after Trump gave Iran 48 hours to make a deal or reopen the Strait of Hormuz.

Even though geopolitical risks usually support gold, the recent strength in the US dollar and rising bond yields are limiting upside. Higher oil prices are increasing inflation concerns, which keeps expectations of higher interest rates for longer, and that is negative for gold.

Looking ahead, if tensions ease and oil prices fall, gold could recover. But if the conflict continues and energy prices remain high, gold may stay under pressure. Still, inflation uncertainty, geopolitical risks, and central bank demand should help prevent a sharp drop in prices.

From a technical perspective, $4,660 is the first key support level, followed by $4,556 , with $4,380 remaining major long-term support. On the upside, $4,800 is immediate resistance which is also the the 50-day SMA, then $4,860, while $5,000 is the key psychological resistance level.

XAU/USD Daily Chart

Bottom line:

Gold remains sensitive to Middle East developments. Continued high oil prices and strong yields may pressure gold, while easing tensions could support a recovery. Key levels to watch are $4,660 support and $4,800 resistance.