US-Iran Tensions Eased, Gold Sees Early Signs of Recovery
The easing of US-Iran tensions has led to a shift in global financial markets, sparking a risk-on sentiment. Crude oil prices declined sharply as concerns over potential supply disruptions faded, reducing inflation expectations.
Investors rotated into US Treasuries, driving bond prices higher and Treasury yields lower. This, in turn, weakened the US Dollar, while gold advanced by about 1% due to the weaker currency and lower interest rates.
The de-escalation of the conflict also had a positive impact on global equities, as they rose alongside gold. The technical analysis suggests that there is a high probability, around 60%, that the US Dollar Index (DXY), US 10-Year Treasury Yield, and WTI crude oil will continue to weaken over the next one to two trading sessions.
Gold's price has been supported by its ability to defend a key support level on the Daily chart and reclaiming the 20-day Simple Moving Average (SMA 20). On the 4-hour chart, gold is trading above both the SMA 20 and SMA 50, indicating short-term bullish momentum.