Gold Price Forecast: XAU/USD challenging critical support yet again as FOMC Minutes loom
- Gold is miring in seven-week troughs near $4,450 early Wednesday, looking to extend the previous sell-off.
- The US Dollar Index hits six-week highs on ongoing US-Iran woes, elevated Treasury yields and Fed rate hike bets.
- Gold eyes a sustained break below the falling wedge resistance-turned-support at $4,450 amid bearish daily RSI.
Gold is consolidating the latest leg down to seven-week lows near $4,450 early Wednesday, following a 1.85% decline seen on Tuesday. Sellers appear to take a breather ahead of the Minutes of the US Federal Reserve’s (Fed) April monetary policy meeting.
Gold: All eyes on Iran risks, Fed Minutes
Gold traders are weighing the latest threat by United States (US) President Donald Trump to resume attacks on Iran in “two or three days” if Tehran keeps refuting the significant concessions he wants before a deal can be struck to end the Middle East war.
Trump’s fresh warning comes after he called off a strike on Iran after the latter submitted a revised peace proposal, while also at the request of the US’ Gulf allies.
Against this backdrop, there seems to be no end in sight to the war, and with the effective closure of the Strait of Hormuz, Oil price extends its upward trajectory, aggravating inflation concerns and sending global bond yields through the roof.
The 30-year US Treasury bond yields surged to the highest level since July 2007, near 5.20%, while the 10-year benchmark yields rose above 4.50% key level.
Elevated US Treasury bond yields and inflation expectations have ramped up the odds for a Fed interest rate hike by December this year. The hawkish Fed expectations and rallying yields continue to act as a tailwind to the US Dollar (USD) at the expense of the non-yielding Gold.
The US-Iran geopolitical uncertainty also keeps the haven demand for the Greenback intact, exacerbating Gold’s pain. A stronger USD makes Gold more expensive for international buyers using foreign currencies.
That being said, Gold traders will continue to watch out for evolving developments in the US-Iran war before the release of the Fed Minutes due later in the North American session on Wednesday.
The Minutes will be dissected to gauge the central bank’s outlook on interest rates and inflation.
Gold price technical analysis: Daily chart
In the daily chart, XAU/USD trades at $4,454.48, maintaining a bearish near-term tone as it holds beneath a stack of key moving averages. The 21-day simple moving average (SMA) at roughly $4,628 and the 50-day SMA near $4,689 sit well above spot, reinforcing an overhanging supply zone, while the 100-day SMA around $4,793 further caps the broader upside. The Relative Strength Index (14) hovers in the mid-30s, hinting at lingering downside pressure, even as price trades modestly above the longer-term 200-day SMA, which tempers the bearish bias only slightly.
On the topside, initial resistance is seen at the 21-day SMA near $4,628, followed by the 50-day SMA around $4,689 and then the 100-day SMA close to $4,793, with the broader downward resistance trend line adding to the cap above those levels. On the downside, immediate focus is on the nearby intraday pivot around $4,454 (falling wedge resistance-turned-support), with stronger structural support emerging at the 200-day SMA near $4,364; a decisive break below this latter floor would open the door to a continuation of the prevailing downtrend.
(The technical analysis of this story was written with the help of an AI tool.)
Economic Indicator
FOMC Minutes
FOMC stands for The Federal Open Market Committee that organizes 8 meetings in a year and reviews economic and financial conditions, determines the appropriate stance of monetary policy and assesses the risks to its long-run goals of price stability and sustainable economic growth. FOMC Minutes are released by the Board of Governors of the Federal Reserve and are a clear guide to the future US interest rate policy.
Next release: Wed May 20, 2026 18:00
Frequency: Irregular
Consensus: -
Previous: -
Source: Federal Reserve
Minutes of the Federal Open Market Committee (FOMC) is usually published three weeks after the day of the policy decision. Investors look for clues regarding the policy outlook in this publication alongside the vote split. A bullish tone is likely to provide a boost to the greenback while a dovish stance is seen as USD-negative. It needs to be noted that the market reaction to FOMC Minutes could be delayed as news outlets don’t have access to the publication before the release, unlike the FOMC’s Policy Statement.
Gold FAQs
Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
Author
Dhwani Mehta
FXStreet
Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.
