Gold Prices Under Extreme Pressure as Analysts See Rallies as Opportunity to Sell

Gold prices have been under significant pressure. With spot gold falling 2% to $4111 in the week ending September 25. Driven by elevated oil prices and a strengthening US Dollar. The ongoing conflict between the US and Iran has kept oil prices supported.

With crude oil prices reversing Friday's slide of 2.13% and rising sharply on Monday on uncertainty over the Hormuz situation.

According to Praveen Singh, Head of Currencies and Commodities at Mirae Asset ShareKhan, the metal's under extreme downside pressure due to exponential rises in real yields and a strengthening US Dollar, making any rallies in gold prices an opportunity to sell.

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Spot gold at the time of writing this article on Monday night was trading with a huge daily loss of nearly 4% at $4130. A significant drop from its previous low of $4111 on Monday.

The US and China's bilateral trade truce extension to January 10. 2027, is expected to have a positive impact on global trade and economic growth, with the reduction of tariffs on around $30 billion worth of imports from each other.

President Trump's rejection of Iran's 7-day proposal to reach a phased deal to open the Strait of Hormuz has kept oil prices supported. With Saudi Arabia restoring most of the flow through its East West pipeline that was damaged in drone attacks earlier this month.

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The US and China's agreement also marks a positive development in the ongoing East-West tensions. With Qatari mediators expected to hold talks with Iran and the US Monday or Tuesday as, Trump said. that talks may resume this week.

The upcoming September nonfarm payroll report, scheduled for release on October 2, will be a significant influence on the direction and level of gold prices. With the metal facing a test of support in the $4000-$4030 zone.

The gold market is also closely watching the US Dollar. This has been trading at $104.77, a significant increase from its previous low of $104.45, and is expected to continue its upward trend, further pressuring gold prices.