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Published: 28 May 2026,07:25
Daily Market Analysis New
*Gold remains under pressure as markets increasingly view the U.S.-Iran conflict as an inflation shock rather than a traditional safe-haven event
*Rising oil prices have strengthened inflation expectations, pushing Treasury yields and the U.S. dollar sharply higher
*Higher real yields continue reducing gold’s attractiveness since bullion does not generate interest income
Gold has been under heavy pressure recently because markets are no longer reacting to the Middle East conflict as a pure safe-haven event. Instead, investors are treating the U.S.-Iran conflict and the Strait of Hormuz disruption mainly as an inflation shock. Rising oil prices have pushed inflation expectations higher, which has caused Treasury yields and the U.S. dollar to strengthen sharply. This environment is negative for gold because bullion does not generate interest, making it less attractive when bond yields rise.
The biggest driver behind the recent selloff has been the market repricing Federal Reserve expectations. Earlier this year, traders expected multiple rate cuts, but after oil prices surged and inflation data remained sticky, markets began pricing in the possibility that the Fed may delay cuts or even raise rates again before year-end. Rising real yields have therefore become the main headwind for gold.
Geopolitical headlines have also created major volatility. Markets initially sold oil and supported equities on hopes that the U.S. and Iran could reach a deal to reopen the Strait of Hormuz. However, fresh U.S. strikes in Iran, continued military tensions, and conflicting comments from both Washington and Tehran have kept uncertainty elevated. The problem for gold is that this uncertainty is supporting oil prices more than safe-haven demand.
Institutional sentiment has become more cautious in the short term. UBS recently lowered its year-end gold forecast, citing high real yields and weaker ETF inflows. Analysts increasingly believe that inflation driven by energy prices could keep central banks hawkish for longer, limiting upside momentum in bullion. At the same time, physical demand remains strong, especially in Asia. Recent World Gold Council data showed bar and coin demand surged more than 40% year-over-year in Q1 2026, indicating long-term demand for gold remains intact despite paper-market weakness.
The next key catalyst is the U.S. Core PCE inflation report. A hotter-than-expected reading would likely strengthen the dollar and pressure gold further, while softer inflation could revive hopes for Fed easing and support a sharp rebound in bullion prices.
Technical Analysis
Gold, H4:
Gold remains under pressure after extending its recent breakdown below the key 4,520 support region, with price continuing to trade near the 4,380 support zone. Recent price action shows XAU/USD accelerating lower following the failure of a small consolidation structure, reinforcing the broader bearish trend as sellers continue to dominate short-term momentum.
Momentum indicators continue to reflect increasing downside pressure. The Relative Strength Index (RSI) has dropped toward oversold territory, suggesting that bearish momentum remains strong despite the potential for short-term exhaustion. Meanwhile, the MACD remains firmly in negative territory, with both signal lines continuing to trend lower while the histogram expands on the downside, reflecting strengthening bearish momentum following the recent selloff.
Despite the sharp decline, gold still faces strong overhead resistance near the 4,520 region, with additional resistance levels seen at 4,590 and 4,640. As long as price remains below these levels, the broader short-term outlook may continue to favor bearish conditions, particularly after the confirmed breakdown below the previous consolidation range.
Overall, gold appears to remain in a weak corrective phase following its recent rejection from higher resistance levels, although oversold momentum conditions may trigger temporary stabilization or short-term rebound attempts. A sustained break below the 4,380 support region could expose deeper downside risks, while a recovery back above 4,520 would be needed to improve the near-term outlook.
Resistance Levels: 4520.00, 4590.00
Support Levels: 4380.00, 4255.00
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