Gold Price Forecast: XAU/USD eyes acceptance above $4,150 amid Hormuz deal hopes

Gold is building on its recovery from near the $4,020 region in Wednesday’s Asian trades, advancing beyond the $4,100 round level.

Gold capitalizes on US-Iran peace deal hopes

Gold buyers are extending their control amid further weakness in Oil prices, which continue to ease inflationary concerns and weigh on US Federal Reserve (Fed) interest rate hike bets and thus, the US Dollar (USD).

WTI – the US oil benchmark – resumes its previous downside and hits three-week lows near $73.50, following an Axios report, citing two regional sources and a US official stating that “the US, Iran and Oman are closing in on an interim agreement to reopen the Strait of Hormuz, with the U.S. aiming for a Wednesday announcement.”

This headline added to the market optimism induced by the recent claims from senior US officials that progress was made on negotiations to reopen the Strait of Hormuz, even though Iran rejected those claims late on Tuesday.

Analysts at ING note that “lower energy prices have eased some inflation concerns, offering a more supportive backdrop for bullion.” However, they add that this support is being tempered as “markets continue to assess the outlook for US monetary policy following last week's Federal Reserve meeting,” leaving “gold… likely to remain caught between improving geopolitical sentiment and ongoing uncertainty over US interest rates.”

With risk flows in full steam and US jobs data weakening, the Greenback remains under bearish pressure, allowing Gold to see a decisive break higher.

However, it remains to be seen whether the Hormuz reopening deal actually lasts and whether the US ADP Employment Change data surprises to the upside. These factors could impede Gold’s upward trajectory.

The US ADP Employment Change is foreseen at 70K in July, down from 98K reported in June.

Currently, markets are pricing in a 55% chance that the Fed will lower rates in September, down from about 65% a day ago, according to the CME Group’s FedWatch Tool.

Gold traders seem to ignore recent hawkish commentary from Fed policymakers.

Fed’s Schmid delivered a slightly more hawkish-than-usual message early Wednesday, with a 7.3/10 FXS Speechtracker score relative to the historical average of 7/10, stressing that current policy is “not tight” and that tighter monetary policy is needed to return inflation to 2%. The emphasis on AI-related investment as a fresh inflation driver, the warning that recent disinflation is too tentative to confirm an easing trend, and the view that inflation remains “too high” and “worrisome” all reinforce a bias toward additional restraint, even if some pressures stem from supply shocks. Overall, the tone supports a firmer Dollar as markets reassess the likelihood and timing of future rate cuts.

The FXS Fed Sentiment Index slipped by 0.96 points to 145.80, signaling a modest pullback in perceived hawkishness following the speech. However, with the FXS Fed Sentiment Index still far above the neutral 100 mark, the policy backdrop remains firmly hawkish despite the slight softening, consistent with Schmid’s call for tighter conditions to secure the inflation target.

Gold price technical analysis: Daily chart

In the daily chart, XAU/USD trades at $4,129.18. The metal holds above the 21-day simple moving average (SMA) at $4,063, but remains capped by the 50-day SMA at $4,160, keeping the broader picture tilted to the downside while allowing for near-term recovery attempts. The 100-day and 200-day SMAs, clustered well above price near $4,398 and $4,491 respectively, reinforce the notion of a market still trading below its primary trend gauges. The Relative Strength Index (RSI) at 52.8 has turned marginally positive, hinting that selling pressure is easing, yet it does not offset the weight of the overhead moving averages.

On the topside, initial resistance is located at the 50-day SMA around $4,160, where a sustained break would be needed to extend the rebound toward the 100-day SMA at $4,398 and then the 200-day SMA near $4,491. On the downside, immediate support emerges at the 21-day SMA at $4,063, with a break there exposing the rising trend-line support drawn from prior lows, now coming in around $3,951.

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