Gold (XAU/USD) traded lower on Monday, falling back to the $4,500 level after being rejected at the $4,590 resistance area on Friday, thereby reversing its previous gains [1]. The decline in gold prices comes as geopolitical tensions intensify, with the US and Iran exchanging attacks earlier in the day and Israel expanding its operations in Lebanon, which has further strained an already fragile ceasefire in the region [1]. Iranian parliamentary leaders have vowed retaliation, citing 'clear evidence of US non-compliance with the ceasefire,' while US President Donald Trump is still expected to sign a memorandum of understanding to extend the truce [1].
On the economic front, investors are closely watching the upcoming US ISM Manufacturing Purchasing Manager’s Index (PMI) report, which is anticipated to indicate healthy business activity and potentially support the US dollar [1]. Additionally, market participants are awaiting a series of US labor data releases, with particular focus on Friday’s Nonfarm Payrolls, as these figures are expected to provide further insight into the Federal Reserve’s monetary policy direction [1].
From a technical perspective, gold remains vulnerable below the $4,600 mark. Momentum indicators on the 4-hour chart, such as the Relative Strength Index (RSI) near 50 and a flattening MACD, suggest fading bullish pressure [1]. Bears are expected to test Friday's low around $4,490, which may offer some support, while a further decline could bring the May 28 low near $4,365 into focus [1]. Conversely, a break above the $4,590 resistance could shift attention to mid-May lows at $4,645 and the top of the bearish channel at $4,670 [1].
CONCLUSION
Gold prices have retreated to $4,500 amid heightened geopolitical risks and ahead of key US economic data releases. Technical indicators point to continued vulnerability below $4,600, with market participants awaiting further signals from US labor data and Federal Reserve policy outlook.