Gold Price Forecast: XAU/USD falls as demand for the US Dollar resurges

XAU/USD Current price: $5,087

• The war in the Middle East intensifies, reviving demand for the US Dollar.
• United States employment-related data indicated resilience in the sector.
• XAU/USD resumes its decline, could challenge the weekly low at $4,977.

Spot Gold resumed its slide on Thursday, accelerating south during American trading hours. The XAU/USD pair traded as low as $5,054, bouncing just modestly from the level as increased tensions in the Middle East revived demand for the US Dollar (USD).

Two main factors backed the Greenback: On the one hand, crude oil prices rose to fresh one-year highs amid headlines indicating interruptions in the Strait of Hormuz and attacks on vessels in the region. On the other hand, the United States (US) employment-related figures indicated the labor market remains resilient.

The Challenger Job Cuts report showed that US-based employers announced 48,307 job cuts in February, down 55% from the 108,435 job cuts in January. Also, Initial Jobless Claims for the week ended February 28 rose by 213K, matching the previous reading but below the 215K expected. Finally, Nonfarm Productivity in Q4 2025 was up 2.8%, worsening from the previous 5.2%. Unit Labor Cost in the same period rose 2.8% vs the -1.8% posted in Q3.

The US will publish the February Nonfarm Payrolls (NFP) report on Friday, expected to show that the country added 59K new job positions in the month. In the same period, the Unemployment Rate is foreseen at 4.3%, unchanged from January. The country will also publish January Retail Sales, delayed data due to the partial government shutdown from last February.

XAU/USD short-term technical outlook

Technical Analysis:

In the 4-hour chart, XAU/USD trades with a mildly bearish bias, as the price extends below the 20-period Simple Moving Average (SMA) near $5,190 and battles to regain ground above the 100-period SMA around $5,107, while still holding above the rising 200-period SMA near $5,051. The short-term average has rolled over and now points lower, signaling fading upside pressure after the recent spike toward $5,400. At the same time, the Momentum indicator has moved into negative territory but ticks north, while the Relative Strength Index (RSI) indicator aims south in the 40 area, both reinforcing a potential slide.

Immediate resistance emerges at the 100-period SMA at $5,107, followed by the 20-period SMA near $5,190, with a break above this area opening the way toward the recent congestion around $5,260 and then the $5,320 region. On the downside, initial support comes at the 200-period SMA, clustered near $5,051, followed by the weekly low at $4,997. k.

In the daily chart, XAU/USD retains a modest bullish stance as price holds above the rising 20-day SMA near $5,085, while far above the 100- and 200-day SMAs, which trend firmly higher and confirm a dominant underlying uptrend. The 14-day Relative Strength Index cools to the low-50s from overbought extremes, indicating momentum has normalized without breaking the broader bullish structure, while the Momentum indicator heads lower just above its midline, not enough to confirm a steeper decline.

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