Gold and silver prices once faced pressure at the beginning of the session when the USD index increased and US Treasury bond yields edged up, causing temporary buying power to weaken. However, safe-haven demand returning helped the precious metal quickly narrow its decline and reverse to increase in the new trading session.
Market developments continue to be greatly influenced by the Middle East situation. Iran is cautious about the possibility of participating in the next round of negotiations in Pakistan, while the US still maintains control measures in the Strait of Hormuz and increases diplomatic pressure. Uncertain signals surrounding peace prospects make market sentiment maintain a risk-taking state.
Besides geopolitical factors, concerns about the risk of global stagnation are increasing as the accumulated economic impact of more than seven weeks of conflict in the Middle East is forecast to gradually become clearer through business surveys this week. Purchasing managers' indices expected to be released in many major economies will provide more signals about the level of weakening of growth in the context of energy price pressure still maintained at a high level.
The International Monetary Fund (IMF) recently lowered its global economic growth forecast for 2026 to 3.1%, while raising its inflation forecast due to rising energy and food prices. According to the IMF, even if the conflict ends early, the global economic recovery process still needs more time to stabilize.
This week, the market is also closely monitoring US retail sales data – an important indicator reflecting consumer health. If the data exceeds expectations, the possibility of maintaining high interest rates for a longer time may put pressure on gold. Conversely, weakening data will strengthen the safe haven role of precious metals in the context of increasing growth risks.
Technically, the next goal of the buying side is to bring gold prices above the strong resistance level of 5,000 USD/ounce, while the important support zone continues to lie around the 4,500 USD/ounce mark.
