TLDR
- Gold climbed 0.4% to approximately $4,509/oz on Monday following a decline to $4,000/oz during the previous week
- Market analysts from OCBC highlight the recovery appears technical in nature, identifying critical resistance points at $4,624, $4,670, and $4,850/oz
- Yemen-based Houthi militants launched strikes against Israel during the weekend, intensifying concerns about regional conflict expansion
- Iranian forces targeted aluminum production centers in Bahrain and United Arab Emirates, driving aluminum valuations up 5.4%
- Elevated energy costs combined with dollar strength continue weighing on gold, which has declined 13% during the current month
Precious metal valuations moved higher during Monday’s Asian trading session, with gold advancing 0.4% to reach $4,509.51 per ounce. Corresponding futures contracts similarly posted 0.4% gains, settling at $4,537.40 per ounce.
This uptick follows a volatile trading period that witnessed spot gold plummet to $4,000 per ounce before staging a comeback toward the $4,500 mark by Friday’s close.
According to ANZ market strategists, value-seeking investors entered positions following what they characterized as one of the most significant gold liquidations in recent years. Exchange-traded fund redemptions tied to gold holdings contributed to a monthly price erosion exceeding 15%.
Despite Monday’s gains, gold remains underwater by more than 13% for the month. The strengthening U.S. dollar alongside surging petroleum prices has capped the metal’s recovery potential.
Brent crude broke through the $115 per barrel threshold after Houthi forces from Yemen joined the conflict and announced their involvement in weekend missile operations targeting Israel.
Market observers at OCBC characterized gold’s bounce from recent lows as predominantly technical in character. While noting that the relative strength index has emerged from oversold conditions, they cautioned this metric alone doesn’t validate a durable uptrend.
Their analysis pinpointed crucial resistance thresholds for spot gold positioned at $4,624, $4,670, and $4,850 per ounce. Inability to maintain levels above these benchmarks could result in renewed weakness, according to their assessment.
Escalating energy expenses represent an additional headwind. OCBC strategists noted these costs threaten to sustain inflationary pressures, potentially lifting Treasury yields and establishing a more hostile backdrop for precious metals.
Iran War and the Risk of Escalation
The U.S.-Israel military campaign against Iran advanced into uncharted territory during the weekend period. Houthi forces, which maintain Iranian backing and operate from Yemen, executed strikes against Israeli territory, amplifying anxieties about conflict expansion and possible interruptions to Red Sea commercial shipping corridors.
Tehran announced its readiness to counter a potential ground offensive from U.S. forces, responding to intelligence suggesting Washington was deploying thousands of additional military personnel to the theater.
President Trump informed media representatives that diplomatic channels with Iran were producing positive momentum and suggested an agreement might be approaching. He provided no specific timeframe while simultaneously cautioning about additional military operations against Tehran.
Trump had previously pushed back the deadline for operations targeting Iranian energy assets until early April.
Aluminum Markets Shaken by Iranian Strikes
Iranian military forces launched operations against aluminum manufacturing installations in Bahrain and the United Arab Emirates over the weekend. Three-month aluminum contracts traded on the London Metal Exchange surged 5.4% to $3,461 per metric ton, registering monthly gains exceeding 10%.
Aluminium Bahrain acknowledged that its operations came under attack and indicated it was conducting damage evaluations.
Emirates Global Aluminium reported that its Al Taweelah facility located in Abu Dhabi experienced substantial destruction from Iranian unmanned aerial vehicles and missile bombardment.
ANZ market specialists issued warnings that approximately 4 to 5 million tons of aluminum exports from the region face ongoing disruption risk, with no viable replacement sources available to compensate for the production gap.
Silver declined 0.9% to $69.09 per ounce, while platinum advanced 1.8% to $1,898.73 per ounce during Monday’s session.
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