Uncertainty around U.S.–Iran negotiations was a key driver of market sentiment. The current two-week ceasefire agreement is set to expire on Wednesday, and conflicting signals regarding a second round of peace talks have heightened investor caution. Over the weekend, tensions around the Strait of Hormuz escalated again, undermining hopes for a lasting resolution. The strait remains effectively under joint pressure from U.S. naval forces and Iran, with ongoing instability pushing oil prices higher and intensifying inflation concerns.

Strong U.S. economic data added further downward pressure on gold. March retail sales rose 1.7% month-on-month, significantly exceeding expectations of 1.4% and accelerating from February’s 0.7% increase. This marked the strongest growth since March 2025. The increase was largely driven by higher fuel prices linked to escalating tensions with Iran, with gasoline station revenues surging 15.5% year-on-year. Meanwhile, the four-week average of ADP employment data rose from 39,000 to 54,800, reinforcing the narrative of a resilient U.S. economy.

The stronger dollar and rising Treasury yields also weighed on gold. The U.S. dollar index gained 0.2% on the day, making gold more expensive for holders of other currencies and reducing demand. At the same time, the benchmark 10-year U.S. Treasury yield moved higher, further increasing the opportunity cost of holding gold.

Developments related to Federal Reserve policy also drew market attention. Kevin Warsh, the nominee for Fed Chair, called for structural reforms during his Senate Banking Committee confirmation hearing. He advocated for a new framework to address inflation, updated policy tools, and a revamp of communication strategies. While he did not provide specific details, he emphasized that persistently high prices remain a significant burden on U.S. households.

Market Interpretation:

On the four-hour chart, gold is showing a modest rebound after its decline, with MACD lines and volume bars converging below the zero axis. Looking ahead, investors should focus on three key factors.

First, the outcome of U.S.–Iran negotiations following the expiration of the ceasefire agreement. Any news regarding an extension or breakdown of talks could trigger significant volatility in gold prices.

Second, movements in the U.S. dollar and oil prices, both of which directly influence gold’s attractiveness and inflation expectations.

Third, Federal Reserve policy developments, particularly details of any new inflation framework, which will help clarify interest rate expectations and guide gold’s medium-term direction.