Spot gold came under renewed pressure on Monday, briefly falling to a one-week low before staging a modest rebound. However, prices remain broadly subdued, struggling to break out of a near-term downward trend.

A key factor behind gold’s weakness is escalating geopolitical tension in the Middle East. The standoff between the United States and Iran over the Strait of Hormuz — a critical global energy transit route — has intensified, raising concerns about oil prices and inflation.

In the latest developments, the U.S. Navy intercepted and detained an Iranian cargo vessel in the Gulf of Oman, a move widely viewed as part of a broader blockade strategy. Iran strongly condemned the action, calling it a violation of a ceasefire agreement nearing expiration, and responded by briefly reopening and then re-closing the strait.

Earlier, a 10-day ceasefire between Israel and Lebanon’s Hezbollah had temporarily eased tensions, but failed to resolve underlying conflicts.

U.S. President Donald Trump stated that the naval blockade of Iranian ports would remain in place until a comprehensive peace agreement is reached. The firm stance has dampened market optimism for swift progress in negotiations ahead of the April 22 ceasefire deadline.

Iranian state media, meanwhile, said officials would refuse to engage in talks unless the blockade is lifted, signaling a continued impasse. The lack of compromise has prolonged geopolitical uncertainty and triggered renewed risk aversion in global markets, boosting demand for safe-haven assets such as the U.S. dollar.

Beyond geopolitics, financial market dynamics are also weighing on gold. Oil prices rebounded sharply during the session, reigniting inflation concerns. This has pushed U.S. Treasury yields higher, strengthening the dollar and reducing the appeal of non-yielding assets like gold.

Expectations surrounding Federal Reserve policy have added further complexity. According to FedWatch data, markets currently price in roughly a 40% probability of rate cuts by the end of the year. While this outlook may limit further dollar gains and provide some support for gold, investors have yet to significantly increase bullish positions.

Without clear follow-through buying, market participants remain cautious about the sustainability of gold’s rebound from its March lows.

Market Outlook

On the four-hour chart, spot gold remains under pressure amid a convergence of bearish factors. Escalating U.S.-Iran tensions in the Strait of Hormuz, rising inflation concerns driven by oil prices, higher U.S. Treasury yields, and a relatively strong dollar continue to act as the primary headwinds for gold prices.