Summary:
Gold price drops near $3351 as Trump delays Iran strike decision; key technical levels suggest further downside risk or potential rebound.
The gold price dropped significantly in early Asian trading on Friday, falling nearly $20 intraday to hover around $3351 per ounce. This sharp decline followed comments from former U.S. President Donald Trump, which appeared to ease geopolitical tensions in the Middle East, leading traders to move away from traditional safe-haven assets like gold.
In a surprising shift in tone, Trump announced on Thursday that he would delay the decision on launching air strikes for up to two weeks. He framed the delay as an opportunity to give Iran a final chance to reach an agreement on its nuclear programme. This softer stance came after a series of previously aggressive comments and actions, including calls for Tehran residents to evacuate and an early departure from the G7 summit in Canada.
The change in rhetoric was seen by many, including Bloomberg, as a possible concession. The immediate market reaction was a surge in risk appetite, with traders reducing exposure to gold and other safe-haven assets. As a result, the gold price came under significant pressure.
According to Dhwani Mehta, a senior analyst at FXStreet, the gold price had already ended Thursday's trading session largely flat. However, by Friday morning, it had slipped to a fresh daily low near $3350 per ounce.
Mehta highlighted that the price action broke below the crucial 21-day simple moving average (SMA), a level that had previously acted as support. A failure to close above this threshold could open the door for deeper losses in the coming sessions. Should this occur, the next line of defence would be the 50-day SMA at $3318. followed by the 38.2% Fibonacci retracement level from the April rally, positioned at $3297.
Despite the near-term bearish tilt, Mehta pointed out that the 14-day Relative Strength Index (RSI) remains above the midline, currently near 52. This suggests that buying momentum has not completely faded, although the indicator is pointing lower.
For the gold price to regain positive traction, a decisive break above $3377—the 23.6% Fibonacci retracement level—would be required. From there, the next major resistance lies at the $3400 region, followed by a static barrier at $3440. A push beyond that level could see gold testing the recent two-month high at $3453 per ounce.
While geopolitical developments continue to dictate short-term market movements, traders are watching closely to see whether the gold price can hold above key support zones or face a more prolonged decline. Much will depend on the next steps from the U.S. administration, as well as broader macroeconomic indicators that influence dollar strength and global risk sentiment.
The gold price remains highly sensitive to geopolitical news and policy signals. Trump's decision to delay military action against Iran has temporarily calmed markets, prompting a pullback in gold. Technically, the precious metal faces a critical test at the 21-day SMA, with deeper support levels in view if bearish momentum continues. However, should sentiment shift or tensions rise again, gold's safe-haven appeal could quickly resurface. For now, cautious observation of both price action and political headlines remains essential.
Disclaimer: This material is for general information purposes only and is not intended as (and should not be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by EBC or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.
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