Gold prices rebounded on Tuesday after recent losses, supported by softer oil prices following a fragile ceasefire between Iran and Israel, although concerns over US interest rates continued to cap gains.
Spot gold rose 0.4% to US$4,345.71 per ounce, recovering from its lowest level in more than two months reached during the previous session. US gold futures for August delivery also gained 0.2% to US$4,370.80.
Market sentiment improved after oil prices retreated, reversing much of Monday’s gains as Iran and Israel halted attacks following an appeal by US President Donald Trump. However, uncertainty remains after Tehran warned it could resume hostilities if Israel continued strikes against Hezbollah in Lebanon.
Analysts noted that lower oil prices have eased some inflation concerns, providing support for gold. However, expectations of higher US interest rates remain a key headwind for the precious metal.
According to CME FedWatch data, traders are now pricing in more than a 70% chance of a US Federal Reserve rate hike by December. Investors are also awaiting the release of US consumer price index data on Wednesday for further clues on the central bank’s policy direction.
Meanwhile, Goldman Sachs expects the Fed to keep rates unchanged through 2026 and only begin cutting rates in 2027, citing stronger economic activity and labour market conditions.
Despite Tuesday’s rebound, RHB Investment Bank maintained a bearish technical outlook on COMEX gold, noting that prices remain below both the 20-day and 50-day simple moving averages.
The research house said immediate support is seen at US$4,250, followed by US$4,000, while resistance levels are pegged at US$4,650 and US$4,850.
RHB said the latest price action suggests support has formed around US$4,250, but the overall technical setup remains negative. The bank maintained its short trading position initiated at US$4,605.70 and expects further downside should the US$4,250 support level be breached.
