• Gold rebounds on Monday, partly erasing earlier losses that led prices to hit year-to-date lows after a sharp sell-off of nearly 8%.
• Gold's rebound came as Trump announced he is postponing planned strikes on Iran's energy facilities after engaging in "productive" conversations with Tehran.
• Technically, XAU/USD remains bearish even as the RSI shows oversold conditions.

Gold (XAU/USD) rebounds from year-to-date lows on Monday as bargain hunting emerges after a steep sell-off, with the metal finding support after news that US President Donald Trump postponed planned strikes against Iran's power plants and energy infrastructure.

At the time of writing, XAU/USD is trading around $4,350, after briefly sliding below $4,100 during the Asian session, its lowest level since November 2025.

Trump said he had instructed the Department of War to postpone planned strikes on Iranian power plants and energy infrastructure for five days, subject to the outcome of the ongoing discussions, Reuters reported. The news pushed Crude Oil prices sharply lower, easing inflation concerns and triggering a pullback in the US Dollar (USD) and Treasury yields.

This comes after Trump warned over the weekend that Iran’s power infrastructure could be targeted if the Strait of Hormuz was not reopened within forty-eight hours. In response, Iran threatened retaliation, warning it could target all energy, information technology, and desalination infrastructure belonging to the US and Israel.

The move marks a temporary easing in geopolitical tensions and has lifted market sentiment, although uncertainty around the conflict remains elevated and could cap further upside in the metal unless there is a clear de-escalation and reopening of the Strait of Hormuz. Oil prices remain elevated despite the intraday pullback, keeping inflation concerns and their economic impact at the forefront of market sentiment.

As a result, markets are increasingly anticipating that central banks will keep interest rates higher for longer, or even consider rate hikes if the war drags on and inflation remains persistent.

The repricing of rate expectations was further supported by last week’s central bank meetings, where policymakers broadly opted to hold rates while emphasizing upside inflation risks and uncertainty tied to the evolving geopolitical backdrop.

Markets have priced out Federal Reserve (Fed) interest rate cuts for this year, while in other major economies, expectations for further tightening have strengthened. Higher interest rates increase the opportunity cost of holding non-yielding assets such as Gold.

Looking ahead, markets will keep a close eye on geopolitical developments for direction. With little US economic data scheduled on Monday, Gold will likely be driven by broader market sentiment and any subsequent war-related announcements.

Technical analysis: XAU/USD rebounds from 200-day SMA, downside risks remain

From a technical perspective, XAU/USD has attracted buying interest after bouncing off the 200-day Simple Moving Average (SMA) near $4,095, helping preserve the broader uptrend. However, the near-term bias remains slightly bearish as the metal continues to trade below the 100-day and 50-day SMAs, indicating lingering selling pressure.

Momentum indicators reflect this mixed outlook, with the Relative Strength Index (RSI) hovering near 26, suggesting oversold conditions that could support a short-term rebound, while the Average True Range (ATR) remains elevated, pointing to heightened volatility.

On the upside, the $4,500 level acts as immediate resistance, followed by the 100-day SMA around $4,600. A sustained break above this zone could shift focus toward the 50-day SMA near $4,970 and the key psychological $5,000 mark. On the downside, a sustained break below the 200-day SMA may trigger a deeper pullback toward $4,000.