Gold Price Forecast: XAU/USD buyers still hesitant despite hopes for US-Iran diplomacy

Gold builds on the previous rebound, back above $4,750 early Tuesday amid hopes for another round of US-Iran peace talks.
The US Dollar consolidates near six-week lows amid a return of risk appetite and doubts over the Fed’s policy outlook.
Gold downside remains exposed as the RSI struggles at 50 amid a Bear Cross confirmation.

Dhwani Mehta FXStreet

Gold is clinging to recovery gains above $4,750 early Tuesday, capitalizing on hopes for diplomacy between the United States (US) and Iran. However, concerns over the Strait of Hormuz still pose a downside risk for the bright metal.

Gold awaits a clear directional impetus

Gold builds on the previous rebound in Asia on Tuesday as risk sentiment remains in a sweet spot, weighing negatively on the safe-haven and reserve currency status of the US Dollar (USD).

The US Dollar Index (DXY) consolidates near six-week lows of 98.32, at the press time.

Markets remain optimistic about another round of US-Iran peace talks in the coming days, especially after the recent conciliatory remarks from US President Donald Trump and Vice President JD Vance.

Trump claimed Iran had made contact and wanted “very badly” to strike a deal in the face of his blockade of the Strait of Hormuz.

Trump added that the blockade had come into force at 10am ET on Monday, and the Iranians had subsequently got in touch.

Meanwhile, Vance noted that the US made a lot of progress in its weekend talks with Iran in Pakistan, emphasizing that “the ball is in Iran’s court.”

Adding to the market optimism, CNN News reported, citing a source, Trump administration officials are having internal discussions surrounding the details for a possible second meeting with Iran before the US-Iran ceasefire ends next week.

The Greenback also feels the heat from the uncertainty stemming from doubts over the US Federal Reserve’s (Fed) interest rate outlook amid the Mideast crisis.

Traders have sidelined recent US consumer inflation data as geopolitics continue to lead sentiment and Gold price action. Therefore, the Producer Price Index (PPI) report from the US due later on Tuesday could also be shrugged off.

That being said, further upside in Gold is likely to remain limited as buyers still appear hesitant amid lingering risks on Trump’s Strait of Hormuz gambit and its impact on Oil prices.

Also, the daily technical setup for Gold appears tricky, with bulls and bears fighting to have the upper hand, and hence, checking the upside in the bullion.

Gold price technical analysis: Daily chart

On the daily chart, XAU/USD is hovering around an upward-support trend line that now acts as a pivotal area after the recent pullback from record highs. Price holds above the 21-day and 100-day simple moving averages (SMAs) at roughly $4,664.58 and $4,694.48, suggesting underlying medium-term demand, but remains capped beneath the 50-day SMA at $4,902.29, which limits the topside. The Relative Strength Index (RSI) at 50.95 sits near the neutral line, hinting at balanced momentum as the market digests prior gains.

On the topside, initial resistance is located at the 50-day SMA at $4,902.29; a sustained break above this barrier would open the door to a broader recovery phase. On the downside, immediate support is seen around the current pivot region near $4,772.80, with additional underlying demand aligned at the 100-day SMA at $4,694.48 and the 21-day SMA at $4,664.58, while the 200-day SMA far below at $4,193.01 marks a deeper structural floor in case of an extended correction.

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

Economic Indicator

Producer Price Index (YoY)

The Producer Price Index released by the Bureau of Labor statistics, Department of Labor measures the average changes in prices in primary markets of the US by producers of commodities in all states of processing. Changes in the PPI are widely followed as an indicator of commodity inflation. Generally speaking, a high reading is seen as positive (or bullish) for the USD, whereas a low reading is seen as negative (or bearish).

GBP/USD trims gains, back to around 1.3500

GBP/USD now surrenders part of the earlier move to multi-week peaks around 1.3530 and comes close to the 1.3500 support on Monday. Cable’s uptick comes in tandem with decent gains in the Greenback, always amid persistent uncertainty lingering over the reopening of the Strait of Hormuz and US-Iran talks.

EUR/USD slips to daily lows near 1.1540

EUR/USD now loses further momentum and recedes toward the 1.1540 zone, or daily lows, on Monday. The pair’s bearish performance action comes as investors continue to assess Friday’s disappointing US jobs data in a context where renewed tensions in the Middle East lend decent support to the US Dollar.

Gold clings to daily gains; focus is back to $4,400

Gold picks up pace and advances past the $4,350 mark per troy ounce, adding to Friday’s gains. That said, the yellow metal keeps pushing harder despite the better tone in the US Dollar, and is closely following the Fed’s interest-rate outlook as well as developments in the Middle East

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US Payrolls miss – RBA on deck tomorrow

It would be remiss of me not to kick off this morning’s report with a rundown of last Friday’s US jobs report, which was a belter. Headline payrolls fell by 23,000, versus expectations of an 80,000 gain. The BLS noted that May was revised down by 66,000 (from 129,000) and June by 37,000 (from 57,000), resulting in combined May-June revisions of 103,000 lower than previous reports.

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