Gold Price Forecast: XAU/USD buyers stay hopeful amid Middle East war, China growth woes
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UPGRADE· Gold builds on Wednesday’s rebound and reverts to $5,200 again early Thursday.
- The US Dollar recovers modestly amid Middle East escalation, dovish Fed outlook.
- 21-day SMA holds amid bullish RSI; a daily closing above 61.8% Fibo is critical for Gold buyers.
Gold is building on the previous rebound in Thursday’s Asian trades, testing offers once again at the $5,200 threshold. Deeper escalation of the Middle East war and dovish US Federal Reserve (Fed) monetary policy outlook continue to support Gold.
Gold eyes more US jobs data amid Iran war
The US-Israel-Iran war escalated sharply on Wednesday after a US submarine sank an Iranian warship off Sri Lanka and North Atlantic Treaty Organization (NATO) air defences intercepted an Iranian ballistic missile fired towards Turkey.
Additionally, “the powerful son of Iran's slain supreme leader emerged as a frontrunner to succeed him,” per Reuters, threatening further geopolitical escalation in the region, with the war entering its sixth day.
On the monetary policy front, US President Donald Trump on Wednesday officially nominated former Federal Reserve Governor Kevin Warsh to be the next Fed Chair. Warsh is seen in the pro-easing camp and could likely lower interest rates later this year.
This dovish narrative countered strong US economic data, bumping up the non-yielding Gold at the expense of the US Dollar (USD).
Data published by ADP showed on Wednesday that US private employers added 63,000 jobs in February, gaining more than the 50,000 that economists projected.
The ISM said that the US service sector activity strengthened sharply in February, with the headline index rising from 53.8 to 56.1, well above the market forecast of 53.5.
Attention now turns toward the US weekly Jobless Claims data, while Middle East updates and China economic growth concerns continue to keep investors on the edge and Gold underpinned.
Earlier on, China set its 2026 economic growth target at 4.5%-5%, slightly lower than the 5% pace achieved last year. The dragon nation is the world’s top Gold consumer.
Gold price technical analysis: Daily chart
The near-term bias is mildly bullish as price holds above the 21-day Simple Moving Average (SMA) near $5,080 and extends its advance away from the 50-day and 100-day SMAs clustered below $4,900, which reinforces an established uptrend backdrop. Momentum remains positive, with the Relative Strength Index (RSI) lifting back into the mid-50s after cooling from prior overbought extremes, indicating that buying pressure persists without stretched conditions. Price also trades above the 61.8% Fibonacci retracement at $5,141, measured from the $4,402 low to the $5,598 high, showing that bulls have defended the upper half of the recent corrective range.
Immediate support emerges at the 61.8% retracement at $5,141, followed by the 50% retracement at $4,999, where proximity to the rising 21-day SMA creates a key demand zone. A daily close below that cluster would expose next support at the 38.2% retracement at $4,859. On the upside, initial resistance stands near the recent swing area around $5,340, aligned with the 78.6% retracement, with a break above opening the path toward the $5,600 high. As long as XAU/USD holds above $5,140 on a closing basis, the technical structure favors continuation of the broader uptrend rather than a deeper reversal.
(The technical analysis of this story was written with the help of an AI tool.)
Fed FAQs
Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback.
The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions. The FOMC is attended by twelve Fed officials – the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who serve one-year terms on a rotating basis.
In extreme situations, the Federal Reserve may resort to a policy named Quantitative Easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used during crises or when inflation is extremely low. It was the Fed’s weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy high grade bonds from financial institutions. QE usually weakens the US Dollar.
Quantitative tightening (QT) is the reverse process of QE, whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing, to purchase new bonds. It is usually positive for the value of the US Dollar.
· Gold builds on Wednesday’s rebound and reverts to $5,200 again early Thursday.
- The US Dollar recovers modestly amid Middle East escalation, dovish Fed outlook.
- 21-day SMA holds amid bullish RSI; a daily closing above 61.8% Fibo is critical for Gold buyers.
Gold is building on the previous rebound in Thursday’s Asian trades, testing offers once again at the $5,200 threshold. Deeper escalation of the Middle East war and dovish US Federal Reserve (Fed) monetary policy outlook continue to support Gold.
Gold eyes more US jobs data amid Iran war
The US-Israel-Iran war escalated sharply on Wednesday after a US submarine sank an Iranian warship off Sri Lanka and North Atlantic Treaty Organization (NATO) air defences intercepted an Iranian ballistic missile fired towards Turkey.
Additionally, “the powerful son of Iran's slain supreme leader emerged as a frontrunner to succeed him,” per Reuters, threatening further geopolitical escalation in the region, with the war entering its sixth day.
On the monetary policy front, US President Donald Trump on Wednesday officially nominated former Federal Reserve Governor Kevin Warsh to be the next Fed Chair. Warsh is seen in the pro-easing camp and could likely lower interest rates later this year.
This dovish narrative countered strong US economic data, bumping up the non-yielding Gold at the expense of the US Dollar (USD).
Data published by ADP showed on Wednesday that US private employers added 63,000 jobs in February, gaining more than the 50,000 that economists projected.
The ISM said that the US service sector activity strengthened sharply in February, with the headline index rising from 53.8 to 56.1, well above the market forecast of 53.5.
Attention now turns toward the US weekly Jobless Claims data, while Middle East updates and China economic growth concerns continue to keep investors on the edge and Gold underpinned.
Earlier on, China set its 2026 economic growth target at 4.5%-5%, slightly lower than the 5% pace achieved last year. The dragon nation is the world’s top Gold consumer.
Gold price technical analysis: Daily chart
The near-term bias is mildly bullish as price holds above the 21-day Simple Moving Average (SMA) near $5,080 and extends its advance away from the 50-day and 100-day SMAs clustered below $4,900, which reinforces an established uptrend backdrop. Momentum remains positive, with the Relative Strength Index (RSI) lifting back into the mid-50s after cooling from prior overbought extremes, indicating that buying pressure persists without stretched conditions. Price also trades above the 61.8% Fibonacci retracement at $5,141, measured from the $4,402 low to the $5,598 high, showing that bulls have defended the upper half of the recent corrective range.
Immediate support emerges at the 61.8% retracement at $5,141, followed by the 50% retracement at $4,999, where proximity to the rising 21-day SMA creates a key demand zone. A daily close below that cluster would expose next support at the 38.2% retracement at $4,859. On the upside, initial resistance stands near the recent swing area around $5,340, aligned with the 78.6% retracement, with a break above opening the path toward the $5,600 high. As long as XAU/USD holds above $5,140 on a closing basis, the technical structure favors continuation of the broader uptrend rather than a deeper reversal.
(The technical analysis of this story was written with the help of an AI tool.)
Fed FAQs
Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback.
The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions. The FOMC is attended by twelve Fed officials – the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who serve one-year terms on a rotating basis.
In extreme situations, the Federal Reserve may resort to a policy named Quantitative Easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used during crises or when inflation is extremely low. It was the Fed’s weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy high grade bonds from financial institutions. QE usually weakens the US Dollar.
Quantitative tightening (QT) is the reverse process of QE, whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing, to purchase new bonds. It is usually positive for the value of the US Dollar.
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