Gold (XAU/USD) experienced a significant pullback on Monday, reaching session lows just above $4,650, retreating from last week's high. This decline is attributed to diminishing hopes for a swift resolution to the US-Iran war and robust US employment data, both of which are reducing expectations for imminent Federal Reserve rate cuts [1]. US President Donald Trump rejected Iran's recent peace proposal, which, according to Iranian state media, included recognition of the sovereignty of the Strait of Hormuz. Additionally, Israeli Prime Minister Benjamin Netanyahu stated that the conflict would not end until Iran's enriched uranium is removed, a condition Tehran finds unacceptable [1].
On the economic front, US jobs data released on Friday showed employment growth in April far exceeding expectations, indicating a stabilizing labor market. This development supports the Federal Reserve's more hawkish stance and diminishes the likelihood of monetary easing in the near future. As a result, US Treasury yields surged on Monday, further pressuring precious metals like gold [1].
From a technical perspective, XAU/USD confirms a bearish near-term bias, with momentum indicators such as the Relative Strength Index below 50 and the MACD line trending lower after crossing the Signal line, signaling increased selling pressure. Elliott Wave analysis suggests that gold has completed a 5-wave bullish cycle and is now in an A-B-C corrective phase. Key support levels include the late April and early May highs around $4,655 and the 38.2% Fibonacci retracement near $4,600, with a plausible correction target at the 78.6% Fibonacci retracement at $4,320. Immediate resistance is noted at Thursday's high of $4,764 and mid-April highs near $4,880 [1].
CONCLUSION
Gold prices are under significant pressure due to strong US employment data and persistent geopolitical tensions, which have reduced expectations for near-term Federal Reserve rate cuts. Technical indicators point to a bearish outlook, with further downside possible if key support levels are breached.