Gold’s rebound suddenly turned into something much bigger. After defending the psychological level of 4,500 points earlier this week, the metal rose sharply as markets sold the dollar aggressively amid signs that the United States and Iran may be moving towards a formal agreement to end the war.
The first catalyst came when President Donald Trump abruptly halted Project Freedom, a sign that Washington was prioritizing diplomacy over military escalation in the Strait of Hormuz. The momentum then accelerated dramatically following reports that the US and Iran were now moving closer to the framework of the peace memorandum.
Technically, a decisive break above the 4660.21 resistance level indicates that the pullback from 4889.24 has already been completed at 4500.67. The rebound is now expected to extend towards a retest of 4889.24.
A strong breakout there would not only resume the broader rally from 4098.45, but would also strengthen the case for the correction from 5598.38 to end with a three-wave decline to 4098.45.
Under this scenario, gold could accelerate further to a 61.8% forecast of 4,098.45 to 4,889.45 from 4,500.67 at 4,989.37, then a 100% forecast at 5,291.46.
