Gold Price Forecast: XAU/USD looks south amid US-Iran uncertainty and Death Cross in play

Gold snaps a two-day rebound from seven-month lows, as sellers return in the Nonfarm Payrolls week ahead.
The US Dollar holds the previous bounce amid renewed Mideast tensions, hawkish Fed bets.
Gold stays a ‘sell on rise’ trade amid bearish RSI and Death Cross on the daily chart.

Dhwani Mehta FXStreet

Gold kicks off a new week on a bearish note on Monday, after booking a fourth straight weekly loss and snapping a two-day recovery from seven-month lows.

Gold: ‘Sell-the-bounce’ remains the theme

Gold sellers are fighting back control as the US Dollar (USD) remains on track for its biggest monthly gain in nearly a year amid renewed uncertainty over the ceasefire between the United States (US) and Iran and the prospects of peace talks restarting afresh.

Over the weekend, the US and Iran traded strikes and accused each other of ceasefire violations before they agreed to halt their tit-for-tat attacks and meet in Qatar on Tuesday for negotiations.

Despite fresh hopes for peace negotiations and the resultant retreat in Oil, markets remain wary and prefer to hold the world’s reserve currency, the USD, at the expense of the bright metal.

Additionally, the non-yielding Gold also bears the brunt of increased bets around the US Federal Reserve’s (Fed) interest rate hikes, with markets expecting at least two hikes by the end of this year.

Later this week, beyond geopolitics, the focus remains on the US Nonfarm Payrolls (NFP) data due on Thursday. The US jobs data is critical to providing hints on the health of the labor market and the scope and timing of the Fed rate hikes.

Gold thrives on lower rates, and hence, Fed policy cues will likely have a significant impact on the bullion.

Ahead of that, the European Central Bank's (ECB) annual forum in Sintra, Portugal, will be closely watched, particularly on Wednesday when the new Fed Chairman, Kevin Warsh, will participate in a key policy panel. This follows a surprisingly hawkish debut from Warsh as the Fed Chair earlier in the month.

Gold price technical analysis: Daily chart

In the daily chart, XAU/USD trades at $4,068.30, extending its decline well below the short- and medium-term moving averages and maintaining a bearish near-term bias. Spot is now under the 21-day simple moving average (SMA) at $4,240.86 as well as the 50-day SMA at $4,453.85 and the 200-day SMA at $4,479.26, while the longer-term 100-day SMA at $4,674.59 stays far overhead and reinforces the idea of a market capped by layered resistance. The Relative Strength Index (14) stands near 36, hinting at persistent bearish pressure but not yet oversold conditions.

Further backing the downside, the yellow metal witnessed a Death Cross confirmation after the 50-day SMA closed below the 200-day SMA on a weekly closing basis on Friday.

On the topside, initial resistance is seen at the 21-day SMA around $4,240.86, with further barriers at the 50-day SMA at $4,453.85 and the 200-day SMA at $4,479.26, forming a dense supply zone that bulls would need to reclaim to ease downside pressure. A sustained break above the cluster of daily averages would open the way toward the 100-day SMA near $4,674.59, but while price holds beneath these levels, gold remains vulnerable to additional selling, with traders left to watch for fresh horizontal support developing below the current $4,068.30 area.

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

Economic Indicator

Fed's Chair Warsh speech

Kevin Warsh took office as chairman of the Board of Governors of the Federal Reserve in May 2026, for a four-year term ending in 2030. His term as a member of the Board of Governors will expire in May 2040. Warsh, born in Albany (New York) on April 13, 1970, is an American financier and attorney who already served as a member of the Fed Board of Governors from 2006 to 2011 and was significantly involved in the central bank's response to the financial crisis.

Gold FAQs

Why do people invest in Gold?

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.

Who buys the most Gold?

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.

How is Gold correlated with other assets?

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.

What does the price of Gold depend on?

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.

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