Gold prices slipped slightly on Monday after news that the Strait of Hormuz had been closed again sent oil prices sharply higher, reviving inflation concerns.

Spot gold fell 0.6% to $4,802 per ounce as of 02:20 GMT, after earlier touching its lowest level since April 13.

The decline in gold came as the ceasefire between the United States and Iran, which had previously supported market sentiment last week, showed signs of breaking down. This pushed markets back into a familiar “war trade” environment: oil prices rising, inflation expectations moving higher, and in turn, higher yields and a stronger U.S. dollar, all of which put pressure on gold.

U.S.-Iran tensions rise again

Tensions escalated after the United States seized an Iranian cargo vessel that was attempting to breach the blockade. Iran said it would retaliate, raising concerns that the ceasefire may not hold, even in the short term.

Tehran also said it would not take part in the next round of talks that Washington had planned to initiate before the ceasefire expired.

Since the conflict erupted in late February, gold prices have fallen by around 8% as markets shifted their focus away from safe-haven demand toward concerns over inflation and the prospect of higher interest rates for longer.

In the near term, gold’s direction will likely continue to depend on overall market risk sentiment, which remains closely tied to the progress of negotiations and the degree of escalation in the conflict.

Technical Analysis: Potential Ending Diagonal Pattern

Although gold managed to maintain its upward momentum last week, that momentum is now weakening noticeably. The continued overlapping price action within a narrow range is forming a potential ending diagonal pattern, a signal that typically appears in the final stage of a trend.

In terms of wave structure, gold is still moving within the upward leg from white wave A to white wave B, with an internal a-b-c structure. With the emergence of this pattern, it is highly likely that wave a was completed around the $4,889/oz area, and the market is now entering a corrective move from wave a to wave b.

At the same time, the divergence signal between price and the MACD is becoming increasingly clear, further supporting the scenario of a short-term reversal.

If this scenario is confirmed, the target for white wave b could bring gold prices back toward the $4,500/oz area.

Conclusion

Current macro factors, especially pressure from higher oil prices, inflation concerns, and a stronger U.S. dollar, are creating significant headwinds for gold in the short term.

From a technical perspective, the price structure is showing signs of weakening and a growing likelihood of entering a clearer corrective phase. Therefore, the priority at this stage is to remain cautious with momentum-driven long positions, while closely monitoring price reactions at key support zones.

If the corrective structure is confirmed, the market may present short-term downside trading opportunities before regaining balance for the next bullish cycle.