Gold broke below the psychological mark of $4,000, dipping to $3,943, its lowest level since November. However, demand for the metal returned, resulting in a sharp spike upward to around $4,030.

The catalyst for this movement was the conflicting signals from the US and Iran ahead of new negotiations in Doha, which kept the market in a state of uncertainty. The diplomatic backdrop remains complex. Washington announced that talks with Tehran will start on Tuesday in Doha, but Iran's Foreign Ministry stated that it would send only a delegation of experts and would exclude direct negotiations. Even more concerning is the statement by Kazem Gharibabadi, Iran's Deputy Foreign Minister, about Tehran's intent to continue its plans to control maritime navigation through the Strait of Hormuz. The US, Europe, and Gulf Arab countries oppose this, and this dispute over the future management of this key waterway remains a major sticking point.

Nevertheless, this geopolitical uncertainty has had little effect on gold, which is the paradox of the current market. Since the start of the war in late February, the metal has lost about 25 percent of its value, breaking through key technical levels, including the 200-day moving average, which reflects long-term momentum. The reason is that what matters for gold now is not geopolitics, but interest rates. Although oil prices have decreased following the military spike, expectations that central banks will maintain high rates for a longer duration have not gone away. The easing of tensions and cheap oil do reduce inflation risks; however, the market places much greater importance on expectations of renewed rate hikes in the US and the strengthening of the dollar in the second half of the year. Both factors increase the opportunity cost of holding gold, which earns no interest.

Gold is even ignoring significant news that could support it under different circumstances. Yesterday, the US Supreme Court ruled that Federal Reserve member Lisa Cook can remain in office while appealing Trump's attempt to remove her over unproven accusations. This decision strengthens the independence of the Fed, which the White House pressures to lower rates. The paradox is that a more independent Fed means a lower likelihood of politically motivated easing, which implies that rates will remain high for longer. For gold, this is more of a bearish signal than a reason for growth.

From a technical perspective, buyers need to reclaim the nearest resistance at $4,062. This would allow targeting $4,124, above which it will be quite challenging to break through. The further target will be around $4,186. In the event of a decline, bears will try to take control of $4,008. If they succeed, breaking this range will deal a serious blow to bull positions, pushing gold down to a low of $3,954 with the prospect of reaching $3,906.