Key Highlights
- Yellow metal advanced 0.4% to approximately $4,509/oz Monday following a decline to $4,000/oz the previous week
- OCBC market strategists indicate the rally appears technical in nature, citing resistance points at $4,624, $4,670, and $4,850/oz
- Yemen-based Houthi forces launched weekend offensive against Israel, intensifying concerns about expanding regional hostilities
- Tehran targeted aluminum production sites in Bahrain and UAE, driving aluminum values up 5.4%
- Elevated energy costs combined with dollar appreciation continue constraining gold, which has declined 13% during the current month
The precious metal showed positive momentum during Asian trading hours Monday, climbing 0.4% to reach $4,509.51 per ounce. Futures contracts similarly advanced 0.4%, settling at $4,537.40 per ounce.
This uptick follows a volatile trading period during which spot prices plummeted to $4,000 per ounce before staging a recovery toward $4,500 by week’s end.
ANZ market strategists observed that value-seeking investors entered positions following what they characterized as the most severe selloff in years. Liquidation of gold-backed exchange-traded funds contributed to a month-to-date decline exceeding 15%.
The yellow metal remains under pressure with monthly losses surpassing 13%. Dollar appreciation coupled with rising petroleum costs have limited upside potential.
Brent crude climbed beyond $115 per barrel following Yemen’s Houthi forces’ entry into hostilities and their acknowledgment of a weekend missile attack targeting Israel.
OCBC market strategists characterized the recovery from recent lows as predominantly technical. While they observed the relative strength index had moved out of oversold conditions, they emphasized this signal alone provides insufficient evidence for a durable uptrend.
Their analysis identified critical resistance thresholds for spot gold at $4,624, $4,670, and $4,850 per ounce. Inability to maintain positions above these benchmarks could result in renewed weakness, according to their assessment.
Rising energy valuations present additional headwinds. OCBC strategists cautioned that persistent petroleum price elevation may sustain inflationary pressures, potentially driving Treasury yields upward and creating headwinds for precious metals.
Tehran Conflict and Regional Expansion Concerns
The Washington-Jerusalem military campaign against Tehran entered a fresh phase during the weekend. The Iranian-backed Houthi movement, operating from Yemen, launched attacks against Israel, amplifying concerns about widening hostilities and possible interference with Red Sea maritime commerce.
Tehran announced readiness for potential ground operations by American forces, responding to intelligence indicating Washington’s deployment of thousands of military personnel to the region.
President Trump informed media representatives that diplomatic engagement with Iran was progressing favorably and an agreement might be approaching. He provided no specific timeframe while simultaneously cautioning about additional strikes against Tehran.
The administration had pushed back the deadline for operations targeting Iranian energy infrastructure to early April.
Aluminum Sector Disrupted by Tehran Military Operations
Iran launched strikes against aluminum manufacturing installations in Bahrain and the UAE during the weekend. Three-month aluminum contracts on the London Metal Exchange surged 5.4% to $3,461 per metric ton, recording month-to-date gains exceeding 10%.
Aluminium Bahrain acknowledged its operations were struck and announced ongoing damage evaluation.
Emirates Global Aluminium reported significant damage to its Al Taweelah facility in Abu Dhabi resulting from Iranian drone and missile operations.
ANZ strategists cautioned that approximately 4 to 5 million tons of regional aluminum shipments face ongoing risk, with no readily available alternative sources to replace potential supply disruptions.
Silver declined 0.9% to $69.09 per ounce, while platinum advanced 1.8% to $1,898.73 per ounce during Monday trading.
