Gold prices remained steady near the $4,220 level on Friday as investors reacted positively to growing expectations of a possible agreement between the United States and Iran.
During the European trading session, gold maintained the strong gains recorded a day earlier, supported by reports that both countries could sign a Memorandum of Understanding (MoU) by the weekend.
According to market reports, the agreement may be finalized during the upcoming G7 Summit in Geneva. If signed, the deal could lead to the reopening of the Strait of Hormuz, one of the world’s most important energy shipping routes that handles roughly one-fifth of global oil supplies.
The closure of the Strait in recent months had pushed oil prices sharply higher, increasing global inflation concerns and forcing investors to rethink expectations for interest rate cuts by major central banks.
Because gold does not offer interest payments, higher interest rates generally reduce its attractiveness compared with yield-generating assets. As a result, gold prices struggled in recent months while oil prices surged.
Despite the recent rebound, analysts say gold still faces short-term technical pressure. The metal is currently trading below its 20-day Exponential Moving Average (EMA), which is seen as an important resistance level near $4,398.
Technical indicators suggest bearish momentum has eased somewhat, but downside risks have not completely disappeared. Analysts believe that if gold manages to break above the 20-day EMA, it could signal a stronger recovery and improve market sentiment.
On the downside, the key psychological support level remains around $4,000. If prices fall below that mark, analysts warn that gold could decline further toward the $3,900 area.
For now, traders remain focused on geopolitical developments and the potential impact of a US-Iran agreement on global energy markets and inflation expectations.
