Gold dropped below the psychological $5100 level at the start of the European session but is now trying to hold above it after rebounding. Investors remain concerned about the impact of the prolonged Middle East conflict on oil prices and the global economy, allowing this safe-haven precious metal to attract intraday buying ahead of a potential break of the $5000 psychological level.

On Monday, the U.S.–Israeli operationU.S.–Israeli operation against Iran entered its tenth day with no visible signs of de-escalation. Moreover, the appointment of Mojtaba Khamenei, the son of Ayatollah Ali Khamenei, as the new Supreme Leader signals the continuation of a hardline stance in Tehran. This move is unlikely to receive support from U.S. President Donald Trump, who previously called it "unacceptable," and it increases the likelihood of further escalation of the conflict.

Meanwhile, the blockade of the Strait of Hormuz — a key route for global oil and gas shipments — is heightening the risk of an energy crisis that could undermine global economic momentum. These circumstances further suppress investors' appetite for riskier assets, as evidenced by the collapse of global stock indices, and provide gold with an additional upward push.

At the same time, the intraday surge in oil prices of more than 25% has fueled inflation expectations and sharply worsened forecasts for an imminent easing of Federal Reserve monetary policy, offsetting last Friday's weak Nonfarm Payrolls (NFP) data. As a result, the U.S. dollar surged to its highest level since November 2025, limiting gold's recovery potential and forcing bulls to remain cautious.

From a technical perspective, as long as prices remain above the 20-day simple moving average (SMA), bulls still have a chance to maintain the advantage. Moreover, oscillators on the daily chart have not yet moved into negative territory. However, if prices drop and consolidate below this level, the bears will gain strength.