The spot gold price surged to as high as $4,246 in early Asian trading on Friday, June 12th, a strong rebound that nearly erased all of Wednesday's losses. It is currently trading around $4,190. On Thursday, June 11th, the spot gold market experienced a dramatic reversal. Initially falling to a six-month low of $4,024 per ounce due to Middle East tensions, the price rapidly climbed after news broke that U.S. President Trump had abruptly called off planned military strikes against Iran. It ultimately closed up 3.4% at $4,211 per ounce.

Key Fundamental Drivers

Geopolitics - United States: Hours after announcing plans for renewed airstrikes on Iran, President Trump stated that, given consultations with Iran had been approved by its supreme leadership, he was canceling the strikes scheduled for that evening. The U.S.-Iran agreement is in its final drafting stages and is expected to be signed in Europe this weekend. Upon signing, the Strait of Hormuz will be opened, and the U.S. will lift its blockade. Previously, he also mentioned seizing Kharg Island and other key oil infrastructure points to take full control of Iran's oil and gas markets. U.S. Treasury Secretary Besant stated that if necessary, the U.S. would withdraw funds from Iranian accounts to compensate Gulf states for losses. U.S. media revealed details behind the U.S.-Iran agreement negotiations, indicating that three major disagreements have narrowed under Qatar's mediation.

Geopolitics - Iran: Iran's Foreign Ministry stated that no final conclusion has been reached on the Iran-U.S. agreement. A source from the Iranian negotiation team denied reports of negotiations with the United States. Due to illegal U.S. actions, the Strait of Hormuz remains closed. Vessels should exercise caution as safe passage conditions do not exist. A source indicated that no new negotiations with the U.S. have taken place during the ongoing conflict. Iran's armed forces are on their highest alert and are prepared to respond to various threats and challenges.

Economic Data: The European Central Bank raised its three key interest rates by 25 basis points as expected, the first such move in nearly three years. President Christine Lagarde stated that today's decision was not an aggressive move and that the 25-basis-point hike is a signal. Oil prices closed nearly 6% lower on Thursday. Brent crude fell 5.55% to $88.54 per barrel, while U.S. crude fell 5.96% to $87.17 per barrel. The U.S. Dollar Index fell 0.35% to 99.69 on Thursday, touching a nearly one-week low. Both moves were driven by Trump's last-minute cancellation of military strikes against Iran, which further amplified gold's gains from the previous day.

Technical Analysis Perspective

From the daily chart structure, gold's stabilization above the $4,000 level yesterday was in line with expectations; even a positive close was anticipated. Whether the subsequent recovery can continue depends crucially on whether fundamental news provides further bullish impetus, such as the likelihood of a U.S.-Iran agreement being reached. If no agreement is reached over the weekend, bullish sentiment may fade next week, and gold could potentially turn lower again. Conversely, if an agreement is reached over the weekend, gold may shed its weakness and embark on a medium-term reversal and uptrend. Therefore, overall, today's gold price action is also quite difficult to predict. Influenced by news flow, the uncertainty and risk are too high; it may choose to move within a wide range. During the day, focus on the battle around the 10-day moving average near $4,330 as resistance, and watch for support around the lower boundary of the range near $4,150-4,140. A range-bound oscillation within this area is tentatively expected.

Looking at the gold one-hour chart, the sharp rally occurred only after Trump called off the airstrikes against Iran in the early morning. Although the price rebounded after today's market open, it has currently chosen a relatively calm path of corrective consolidation. Short-term market sentiment has turned cautious, a conservative choice in response to the frequent and chaotic state of news flow. During the day, watch for a pullback to the $4,160-4,140 zone. It is expected that after a retreat to this area, market expectations for a U.S.-Iran agreement over the weekend may trigger another gold rebound. For the upside during the day, continue to monitor the resistance zone around $4,250-4,270. Whether this resistance can be broken will largely depend on news developments.

Trading Recommendations for Today

Conservative traders are advised to watch more and act less, avoiding the frequent and disorderly state of news flow. Aggressive traders can tentatively operate within the $4,160/4,140 – $4,250/4,270 range, employing short-term strategies of buying low and selling high. However, it is essential to maintain extremely light positions and set stop-losses at 10-15 points.