Gold prices (XAU/USD) rallied on Monday, reaching three-month highs at $4,681, following the announcement of new US sanctions targeting Iran-linked entities. US Treasury Secretary Scott Bessent revealed 'unprecedented' economic measures against Tehran, focusing on sectors such as digital assets, technology, gold, aviation, and shipping. Nearly 60 entities were sanctioned, including broker companies and shadow fleet vessels across multiple countries. The operation, named 'Outcast,' aims to block revenue sources funding the Islamic Revolutionary Guard Corps (IRGC). President Donald Trump is also urging world leaders to sever economic ties with Iran [2].
The heightened geopolitical tensions have increased gold's appeal as a safe-haven asset. The World Gold Council reported that bullion ETFs saw inflows of 46.7 million tons, valued at $6.4 billion last week, marking the largest jump in 10 months, primarily driven by North American and European-listed funds. US Treasury yields declined, with the 10-year T-note yield dropping by 3.5 basis points to 4.700%, providing further support for gold. Meanwhile, the US Dollar Index (DXY) rose 0.22% to 99.05 after hitting three-month lows [2].
Technically, gold cleared the 200-day Simple Moving Average (SMA) at $4,516 and reclaimed the May 29 high of $4,595, with momentum remaining bullish as the Relative Strength Index (RSI) entered overbought territory. The next resistance levels are $4,700, the May 7 swing high at $4,764, and $4,800 [2]. Traders are closely watching upcoming US growth, inflation, and jobs data, as well as a speech by new Fed Chair Kevin Warsh at the Jackson Hole Symposium on Friday [2].
In contrast, silver (XAG/USD) reversed course on Monday, declining by 0.59% after failing to break above the $70.00 level. The price retreated to test the 100-day SMA at $68.42, trading at $68.52 after peaking at $69.92. Despite the pullback, silver's uptrend remains intact, with a bullish RSI and a market structure of higher highs and higher lows. Bulls must reclaim $70.00 to target the 200-day SMA at $72.13 and the May 25 cycle high at $78.83. On the downside, a break below the 100-day SMA could see support at $65.64, $62.19, and the 50-day SMA at $61.34 [1].
CONCLUSION
Gold surged to multi-month highs on the back of new US sanctions against Iran, attracting significant safe-haven demand and ETF inflows. Silver, meanwhile, experienced a technical pullback but maintains an overall bullish structure. The market remains focused on upcoming US economic data and central bank commentary, which could further influence precious metals' trajectories.