Oil Price Surge Weighs Heavily on Gold Amid US-Iran Tensions

The recent escalation of tensions between the US and Iran has led to a surge in oil prices, which is putting downward pressure on gold. On June 4 ET, gold prices (XAUUSD) trended lower, falling 1.2% to close at $4,434.29 as WTI crude oil jumped 3%, reaching an intraday high of $97.

The strong ADP employment data released on June 3 added short-term pressure on gold, with U.S. private payrolls adding 122,000 in May, exceeding market expectations of 118,000 and the upwardly revised prior figure of 105,000.

Market focus has shifted to the upcoming May non-farm payroll data to be released on June 5, which will determine gold's short-term trajectory. If the non-farm figure is significantly weaker than expected, it could suggest an accelerating cooling of the labor market and cause Treasury yields to pull back, potentially giving gold recovery momentum.

Gold's daily chart shows a bearish outlook, with price action in recent days indicating weakening bullish momentum. The $4,360 support level becomes critical for bulls, and if gold tests this level again and fails to break below it, the price may see a technical corrective rally.