The possibility of Iran closing the Strait of Hormuz could trigger oil supply shocks and fuel inflation. WTI crude oil (CL) hit $77, while Brent crude oil (BCO) rose above $80 on Monday. These spikes in oil prices may weaken confidence in fiat currencies and strengthen gold’s appeal as a store of value. Moreover, any cyberattacks or retaliatory strikes against US targets could prolong market uncertainty and further boost demand for gold.
On the other hand, Federal Reserve Governor Christopher Waller signaled that rate cuts may begin as early as July. This has created additional uncertainty around the US dollar, which strengthens the outlook for gold.
Gold Technical Analysis
XAUUSD Daily Chart – Coiling
The daily chart for spot gold indicates that the price is consolidating within an ascending triangle, signalling a potential next move. The consolidation near the edge of this triangle indicates a coiling pattern and a break above $3,450 could trigger a strong surge in gold prices.
Additionally, the price is holding above the 50-day and 200-day SMA, signaling the building of positive momentum. Moreover, the RSI remains above the 50 level, further indicating a bullish trend.
