Gold prices edged higher during Monday’s Asian trading session after a week of strong volatility, as market attention remained focused on the possibility of further escalation in the U.S.–Israel conflict with Iran.

Spot gold rose more than 1% to USD 4,530/oz at 09:00 GMT, after having fallen around 1% earlier in the session. Last week, gold briefly dropped to USD 4,100/oz before recovering to around the USD 4,500 level by the weekend.

The strength of the U.S. dollar remains intact

The U.S. Dollar Index has climbed more than 2%, moving back above the 100 level since the conflict broke out on February 28, indicating that capital flows are increasingly returning to the greenback.

Traders are now pricing in a very low probability of Fed rate cuts this year, as persistently high energy prices could further fuel inflationary pressure and reduce the room for monetary easing. This stands in sharp contrast to earlier expectations of two rate cuts before the conflict began.

Although inflation often supports gold in its role as a safe-haven asset, a high-interest-rate environment continues to weigh on this non-yielding metal.

The market is now awaiting remarks from Fed Chair Jerome Powell and New York Fed President John Williams, as their signals could help shape policy expectations in the period ahead.

Technical analysis: Gold is in a consolidation phase

Gold has spent the past week moving sideways in a consolidation range after forming a bottom at USD 4,100/oz on March 23, 2026.

In terms of wave structure, gold is still moving within the decline from Gold B to Gold C, with an internal five-wave sequence of white l1 – t1 – l2 – t2 – l3, known as Million-Dollar Pattern No. 2. At present, price is in the recovery phase from white l2 to white t2. During this corrective stage, multiple corrective wave scenarios may develop in parallel, so special attention should be paid to the internal structure of the move rather than focusing only on price range.

Once wave t2 is completed and confirmed, the main scenario remains that wave l3 will resume and continue pushing prices down toward lower levels.

Conclusion

The current upward move is mainly a technical rebound following a sharp decline, as underlying factors such as high interest rates and inflationary pressure have not changed significantly.

In the short term, this is a phase better suited to short-term trading strategies prioritizing quick entries and quick exits around strong technical confluence zones. Only when white wave t2 is confirmed as complete will the market offer a clearer opportunity to hold longer-term positions in line with the next trend.

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