Gold Plummets as US-Iran Ceasefire Talks Collapse; Experts Warn of Deeper Sell-Off
Safe-haven yellow metal has seen a substantial downturn, shedding over 9% since the initial onset of the US-Iran conflict on February 28. With the latest diplomatic efforts failing to yield an agreement, market analysts are warning of potential further downside in gold prices. Despite this bearish sentiment, the metal recorded a weekly gain exceeding 2% earlier, fueled by hopes of a positive resolution in the truce talks.Failure of US-Iran Ceasefire Negotiations Dampens Gold Sentiment
Peace negotiations between Iran and the United States concluded in Islamabad without reaching any definitive understanding. Delegates from both nations met for peace talks on Saturday, April 11, but after nearly 21 hours of discussions, the talks ultimately collapsed.A senior Iranian official attributed the failure to "excessive demands" emanating from the American side. The US Vice President noted that Tehran's persistent refusal to abandon its nuclear program remained a critical sticking point throughout the discussions.
Latest Trading Figures and Market Dip Assessment
On Friday, spot gold held steady at $4,761.79 per ounce. Concurrently, U.S. gold futures closed 0.6% lower, settling at $4,787.40.The immediate market reaction suggests heightened caution among traders. Anuj Gupta, a SEBI Registered Research Analyst, predicts that gold is likely to open flat to gap-down if geopolitical tensions continue to escalate.
Key Support Levels and Technical Outlook for Gold
Analyzing the technical structure, Ponmudi R, CEO of Enrich Money, advises maintaining a selective buy-on-dips strategy near established support levels. He observes that the metal is currently attempting to build a short-term base after a period marked by significant volatility.Technically, COMEX Gold is trading near the $4,750-$4,800 zone. This price action indicates that downside pressure may be easing, although upside momentum confirmation is still pending.
Experts point to strong underlying support forming in the $4,650 to $4,600 band, which aligns with recent swing lows and is viewed as a near-term demand zone. However, a confirmed breakdown below this crucial support level could potentially extend the correction toward the $4,400 to $4,300 range.
Broader Economic Factors Influencing Precious Metal Pricing
On the fundamental side, analysts suggest that persistent inflation expectations may trigger tighter monetary policy from central banks. This environment increases the likelihood of profit booking or a mild correction in gold prices.Gupta also pointed out that the recent pattern of weaker-than-expected US data—covering employment, CPI, and GDP figures—signals a slowing economy. This economic backdrop, he added, should help limit any sharp downside, providing underlying support to gold prices.
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