Gold struggles to build on intraday bounce, holds steady around $4,650 amid mixed cues

Gold kicks off the new week on a weaker note, though it lacks follow-through and bounces off $4,600.
Inflationary concerns bolster bets for higher interest rates globally and undermine the precious metal.
The USD preserves its bullish bias and turns out to be another factor exerting pressure on the bullion.

Gold (XAU/USD) struggles to capitalize on its modest intraday bounce from the $4,600 mark and remains on the defensive, for the second straight day, heading into the European session on Monday. Bloomberg, citing Axios, reported that the US, Iran, and regional mediators are discussing terms for a possible 45-day ceasefire that could lead to an end of fighting. This, in turn, keeps a lid on the safe-haven US Dollar (USD) and offers some support to the commodity. However, prospects for higher interest rates globally cap the upside for the non-yielding yellow metal.

Investors now seem convinced that the war-driven surge in energy prices would revive inflationary pressures and force major central banks, including the US Federal Reserve (Fed), to adopt a more hawkish stance. In fact, Crude Oil prices advanced to a nearly four-week high on Monday in reaction to US President Donald Trump’s threat to target Iran’s power plants and bridges if the Strait of Hormuz is not reopened by Tuesday. Adding to this, Tehran also outlined a new condition and said that the transit through the strategic waterway could resume if part of the revenue is allocated to compensate Iran for war-related damages.

Moreover, Ali Akbar Velayati, an advisor to Iran’s new Supreme Leader, Mojtaba Khamenei, warned that the resistance front could target the Bab el-Mandeb Strait in the Red Sea—another critical chokepoint. This raises the risk of a further disruption to global trade routes and remains supportive of elevated Crude Oil prices. Meanwhile, the upbeat US Nonfarm Payrolls (NFP) report released on Friday signaled a still resilient labor market and boosted speculation that the Fed will hold rates higher for longer to combat inflation. The outlook, in turn, benefits the USD, which contributes to the offered tone around the Gold price.

The intraday price action, however, makes it prudent to wait for acceptance below the $4,600 mark before confirming that the recent goodish rebound from the $4,100 mark, or a four-month low touched in March, has run out of steam. Traders now look forward to the release of the US ISM Services PMI for some impetus later during the North American session amid thin liquidity on the back of the Easter Monday Holiday in many global financial markets.