Gold (XAUUSD) maintained its recent strength as optimism surrounding the US-Iran peace agreement improved market sentiment. Easing geopolitical tensions reduced concerns about supply disruptions and supported demand for safe-haven assets. At the same time, changing expectations for US Federal Reserve policy continued to influence gold prices. However, uncertainty remains over the implementation of the agreement, which could keep volatility elevated. Investors now focus on both diplomatic developments and key technical support levels that may determine the next direction for gold.
Gold Extends Recovery as US-Iran Peace Deal Boosts Sentiment
Gold extended its recovery and moved higher as optimism surrounding the US-Iran peace agreement improved market sentiment. The United States and Iran announced a peace agreement aimed at ending their conflict, easing concerns over supply disruptions and reducing fears of a prolonged geopolitical crisis. The positive development improved overall market sentiment and supported demand for gold. As a result, the precious metal continued its recent advance.
Washington and Tehran confirmed on Sunday that the agreement will take effect once both sides formally sign the deal. US President Donald Trump said the United States would lift its naval blockade on Iranian ports and allow the Strait of Hormuz to reopen after the agreement is signed. Trump also stated that the agreement would permanently keep the Strait of Hormuz toll free. Meanwhile, the United Kingdom, France, Germany, and Italy expressed their willingness to ease sanctions on Iran if progress continues on its nuclear commitments. These developments increased confidence that the conflict may move toward a lasting resolution.
However, some uncertainty still surrounds the agreement. Iran’s Deputy Foreign Minister, Kazem Gharibabadi, said the proposed 60-day talks will move forward only if the United States fulfills several commitments. These include ending military operations, lifting the naval blockade, and releasing Iran’s frozen funds. Any setback could renew tensions in the Middle East, lift crude oil prices, and increase inflation concerns. Meanwhile, markets have scaled back expectations for a US Federal Reserve rate hike in December, which continues to provide additional support for gold.
Gold Rebounds from Key Support After Breaking Long-Term Trendline
The gold chart below shows a major rising support trendline that guided the broader advance since late 2024. Price repeatedly found support near this trendline during several pullbacks. The structure helped sustain the strong upward move and supported the rally toward record highs. However, gold recently broke below this support line, which signaled a loss of momentum and a shift in the market structure.
After the breakdown, gold moved lower and entered a corrective phase. The decline pushed price toward the $4,100 region, which now stands out as an important support area. The highlighted buy zone suggests that market participants may closely monitor this region for signs of stabilization. Gold has also started to rebound from this area, indicating that support remains active in the near term.
Despite the rebound, gold remains close to a major long-term support area. A sustained move above the former trendline could improve sentiment and support another recovery attempt. On the other hand, a deeper move below the $4,100 zone could increase downside pressure and extend the correction. The reaction around this area will likely determine the next phase of the broader trend and provide important signals for the medium-term outlook.
Gold Outlook: US-Iran Peace Efforts and Fed Policy Influence Gold Prices
Gold remains supported as optimism surrounding the US-Iran peace agreement improves market sentiment and eases geopolitical concerns. However, uncertainty over the implementation of the agreement may continue to keep volatility elevated. At the same time, changing expectations for US Federal Reserve policy remain an important driver for gold prices. From a technical perspective, the $4,100 support zone remains a key area to watch. A sustained recovery above the former trendline could strengthen the outlook, while a move below support could increase downside pressure. The reaction around these levels will likely determine gold's next direction in the medium term.
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