XAUUSD Rebounced Back above $4,300 on US-Iran Deal
- Gold rebounced above $4,300, ~3% up from last week
- A US-Iran peace deal weakened the safe-haven dollar and pushed oil lower
- Hot US CPI (4.2%) and the Fed meeting (from Tuesday) are the key risks
- Bearish technical bias remains intact below the $4,454 200-day SMA
Why Is Gold Rebounding?
A weaker US Dollar and lower oil prices are powering gold's recovery. Here are the key drivers right now-
US-Iran Peace Deal
The US and Iran reached an initial peace deal on Sunday, set to take effect Friday, June 19, ending a nearly four-month conflict. Risk appetite surged, Asian stocks jumped, and traders sold the safe-haven US Dollar, supporting XAUUSD.
President Trump said the agreement would keep the Strait of Hormuz "permanently toll-free," though he warned the US could resume strikes if Iran fails to reach a final nuclear accord, a caveat that keeps some uncertainty in the market.
Kazem Gharibabadi, Iranian Deputy Foreign Minister, said,
“A permanent and immediate end to the war has been declared on all fronts, including Lebanon.”
Lower Oil & Cooler Inflation Bets
With the Strait of Hormuz set to reopen, oil prices slumped, easing inflation concerns. Softer inflation could trim US Federal Reserve rate-hike expectations, a powerful tailwind for non-yielding gold, which tends to benefit when rate-hike bets fade.
A Bounce From $4,000 Support
Gold fell to a year-to-date low near $4,023 last week, its fifth straight weekly decline after US CPI rose 4.2% in May, the hottest reading since 2023. That print fuelled fears the Fed would keep policy tight for longer, dragging gold under $4,200. But heavy bottom-fishing near the $4,000 psychological level sparked the rebound.
Technical Indicators
XAU/USD is recovering, but its daily chart still leans bearish.
Resistance: $4,421 (21-day SMA), then $4,454 (200-day SMA)
Support: $4,000 psychological zone
What Should Traders Do Now?
- Gold trading now needs a daily close above the 200-day SMA to ease the bearish bias. Until then, rallies may stay corrective.
- The Fed is the main event starts Tuesday, the first under new Chair Kevin Warsh. A hawkish hold or hike could pressure gold, while a dovish tone could fuel the rebound.
- Watch the peace-deal follow-through as details on the Strait of Hormuz remain unclear, and any renewed Middle East tension could quickly revive safe-haven demand.
- Manage risk around the Fed and geopolitical news, expect sharp swings and wider spreads, so avoid oversized positions into the announcements.
About the author:
Sarah ThompsonLead Forex Strategist & Financial Writer
Sarah Thompson is a professional Forex trader with over 7 years of experience in the financial markets. She specializes in Forex trading strategies, technical analysis, Gold and Indices market trends, risk management, and performance evaluation. Since joining SureShotFX in 2021, Sarah has authored numerous in-depth articles, reports, and insights for traders of all experience levels.
