Gold Price Forecast: XAU/USD grinds north of $4,000 despite broad US Dollar strength

XAU/USD Current price: $4,002.60

• The US Dollar stands strong across the FX board following major central banks’ decisions.
• The United States government shutdown continues with no resolution in sight.
• XAU/USD showing some tepid bullish signs, not yet out of the woods.

Spot Gold managed to recover some ground on Thursday, trading around the $4,000 mark at the time of writing. The advance was limited, however, by broad demand for the US Dollar (USD). Following the Federal Reserve (Fed) hawkish interest rate cut on Wednesday, the Bank of Japan (BoJ) decided to leave rates unchanged as widely anticipated. However, BoJ Governor Kazuo Ueda delivered some dovish remarks that sent the Japanese Yen sharply lower, while providing additional impetus to the USD.

The Greenback also benefited from headlines indicating that the United States (US) and China reached a trade deal, de-escalating recent tensions. US President Donald Trump met Chinese leader Xi Jinping and agreed on rolling back some of their recent punitive actions. Trump announced it would immediately reduce fentanyl-related tariffs to 10%, and that China will resume buying soybean and agricultural products. Trump also mentioned they reached an agreement on chips and rate earths, although without much detail.

Other than that, the European Central Bank (ECB) also announced its monetary policy decision, leaving interest rates unchanged, as widely anticipated. President Christine Lagarde repeated that the central bank is in a good place and showed no urge to modify the monetary policy.

Finally, it is worth remembering that the US government remains on pause, amid the lack of funding. The US Senate seems in no rush to agree on a bill, which is costing the well-being of thousands of federal employees.

XAU/USD short-term technical outlook

Technical Analysis:

In the 4-hour chart, XAU/USD is currently trading at around $4,002, holding on to solid intraday gains. A bearish 20 SMA slides south at $3,973, sitting just above the 200 SMA, and both are below the current level, providing support. The 100 SMA at $4,109 is marginally easing and acts as immediate resistance. At the same time, the Momentum indicator stands just above its 100 line, suggesting the bearish impulse is losing traction. As for the RSI, it remains flat around 49, reflecting the absence of directional strength despite the intraday bounce. A decisive clearance of the 100 SMA resistance at $4,109 would unlock additional upside, whereas failure to top that level keeps risks skewed toward a pullback to the 20 SMA support at $3,973 ahead of $3,956.

In the daily chart, a bullish 20 SMA rallies above the longer ones, suggesting buyers still hold the broader grip; the 20 SMA stands at $4,080 and now acts as immediate resistance. The 100 SMA is also bullish, advancing to $3,578, while the 200 SMA rises to $3,340, both of which underpin the long-term bullish bias. Finally, the Momentum indicator has managed to bounce from its recent lows, but remains within negative levels, while the RSI indicator has recovered to 51edging back toward neutrality; the uptick hints at tentative buying interest.

(This content was partially created with the help of an AI tool)