Gold Price Forecast: Defending $4,400 is critical for XAU/USD buyers

Gold is replicating negative trades seen in Asia on Monday, as sellers return early Tuesday to challenge critical support just above the $4,400 level once again.

Gold struggles ahead of key US data

Gold is fading the previous recovery from eight-day lows of $4,397, as the US Dollar (USD) rebounds sharply amid a risk-off market environment and rising US Treasury bond yields across the curve.

The Greenback continues to draw support from increased bets around a September Federal Reserve (Fed) interest rate hike, following Chairman Kevin Warsh’s explicit signal on Friday that rate hikes may be needed to curb inflation.

Markets are pricing in a 66% chance of such a move, up from 41% a week ago, according to the CME Group’s FedWatch Tool.

Additionally, the renewed outbreak of hostilities in the Middle East revives the geopolitical risk premium among traders, underpinning the safe-haven appeal of the USD and acting as a headwind for the Greenback-denominated bullion.

US President Donald Trump threatened further strikes against Iran on Monday after the first exchange of direct attacks in a month, while the United Kingdom Maritime Trade Operations (UKMTO) said that a tanker was reportedly ‌struck by three projectiles while sailing out ‌of the ‌Strait of Hormuz, 

Gold traders now look forward to a slew of US labor market data slated for release this week for fresh hints on the Fed’s monetary policy outlook.

The key US jobs data releases include ADP Employment Change and US Nonfarm Payrolls (NFP) due on Wednesday and Friday, respectively.

Meanwhile, the US JOLTS Job Openings Survey and ISM Manufacturing Employment Index, due later on Tuesday, will offer some incentives to Gold traders.

Beyond data, Middle East geopolitical developments will also remain in play.

Analysts at ING highlight that gold is "likely to remain sensitive to incoming US inflation and labour market data," with the near-term outlook still closely tied to the macro data calendar. They note that "central bank buying and geopolitical risks should continue to provide underlying support," but caution that "a stronger Dollar and higher-for-longer rate expectations could limit near-term upside momentum," suggesting that any rallies may struggle to gain sustained traction while US policy remains restrictive.

Gold price technical analysis: Daily chart

In the daily chart, XAU/USD trades at $4,431.95. The metal holds a bullish near-term bias as it climbs above the 21-day simple moving average (SMA) at $4,430.38, while also trading comfortably over the 50-day SMA at $4,217.99 and the 100-day SMA at $4,366.40, which collectively underpin the broader uptrend. The Relative Strength Index (RSI) at 52.96 sits in neutral territory, hinting at steady rather than aggressive upside momentum after the latest advance.

On the downside, immediate support aligns with the 21-day SMA near $4,430, followed by the 100-day SMA at about $4,366 and the 50-day SMA around $4,218, where buyers would be expected to re-emerge on deeper pullbacks. On the topside, initial resistance is defined by the 200-day SMA at $4,530.78; a sustained break above this longer-term average would open the door for a continuation of the bullish sequence toward fresh record highs.

(The technical analysis of this story was written with the help of an AI tool. Know more.)