Key points:

• Gold climbs to $4,560
• Negotiations still going
• Bullion’s act in this war

Bullion’s bizarre behavior during the war highlights a complex network of factors. But most of all, traders love dips.

🥇 Dip Buyers Strike Again

• Gold prices climbed about 1% early Monday, bouncing from around $4,500 to trade near $4,560 an ounce. Traders apparently saw the recent pullback and collectively said: “The shiny stuff looks discounted.” A brief spike toward $4,580 followed before momentum cooled.
• The rebound came after President Donald Trump said talks with Iran were progressing in an “orderly and constructive manner,” hinting the Strait of Hormuz drama may eventually calm down. Oil prices dropped more than 5% on the headlines, easing fears of a prolonged energy shock.
• The Strait of Hormuz is crucial because roughly a fifth of the world’s oil flows through it. When the route gets blocked or threatened, energy prices jump, inflation worries flare up, and every market suddenly develops a nervous twitch.

⚖️ Gold’s Identity Crisis

• Gold has been acting less like a calm “safe haven” and more like an anxious day trader lately. Prices have swung hundreds of dollars in both directions as investors juggle war headlines, oil prices, inflation fears and central-bank expectations all at once.
• Here’s the macro puzzle: lower oil prices could cool inflation, and cooler inflation could eventually open the door to lower interest rates. That’s usually supportive for gold because bullion pays no yield — meaning it looks more attractive when cash and bonds pay less.
• But there’s a flip side. If the Iran conflict drags on and energy costs surge again, inflation may stay sticky. That could force the Federal Reserve under new Chair Kevin Warsh to keep rates elevated, raising the “opportunity cost” of holding non-yielding assets like gold.
• With US markets closed for Memorial Day, trading volumes were thinner than usual, which can exaggerate price swings. In plain English: fewer traders at their desks means every big order punches a little harder.

Source: Tradingview