Gold Price Forecast: XAU/USD eyes $4,000 and US GDP amid fresh US-Iran tensions
- Gold faces rejection once again above $4,100 in the aftermath of the Fed verdict-led volatility.
- The US Dollar pauses post-FOMC sell-off as the US launches fresh strikes on Iran.
- A daily closing above $4,100 and the RSI above 50 are needed to negate Gold’s bearish outlook.
Gold is back in the red early Thursday, after failing to sustain above $4,100 for the fourth time this week.
Gold faces headwinds as Mideast tensions re-erupt
Gold is fading its recent upswing as the US Dollar (USD) attracts dip-buying amid a revival of haven demand as the United States (US) launched fresh strikes on Iran this Wednesday.
The US Central Command said on X that it completed its “heavy wave of strikes” against Iran, hitting the south-western Iranian city of Abadan as well as Qeshm Island.
The US military said, “the strikes were in response to Iran’s attempted missile attacks on US forces in the region and “aimed to further diminish threats posed by Iran and its proxies to American forces, commercial shipping, and neighboring Gulf countries.”
Although Oil prices are little inspired by the renewed hostilities in the Middle East after a pause over the weekend, Gold buyers trade with caution as inflation fears persist following a 6.50% rally in the black gold a day ago.
On Wednesday, Gold saw two-way business after the Fed decided to hold the Fed funds rate at 3.5% to 3.75%, widely expected, with an unexpected hawkish 9-3 vote in favor of such a verdict.
The FXS Fed Sentiment Index was unchanged, moving 0.00 points to a still-hawkish level of 128.64, confirming that the statement leaves the broader policy tone firmly in tightening territory. The combination of a high FXS Fed Sentiment Index reading and an above-baseline FXS Speechtracker score suggests the Fed remains a hawkish anchor for the Dollar, even without an immediate rate move.
However, Fed Chair Kevin Warsh’s non-committal stance on further tightening raised uncertainty about whether the Fed can keep long-term inflation expectations anchored and also if a rate hike remains on the table for the September meeting.
Markets are now pricing in roughly a 35% chance that the Fed will hold rates again in September, up from 24% seen a day before, the CME Group’s FedWatch Tool shows.
These concerns weighed heavily on the USD, fuelling a sharp correction from close to three-month highs and keeping the Gold price rebound intact.
Looking ahead, the US advance second-quarter Gross Domestic Product (GDP, expectations around the Fed’s policy outlook and Middle East geopolitical developments will continue to drive market sentiment, USD dynamics and Gold price action.
The US economy will likely expand by 2.1% on an annualized basis in Q2 2026, at the same pace seen in the previous quarter.
Alongside the US GDP report, Gold traders will also pay attention to the US Jobless Claims and the annual core Personal Consumption Expenditures (PCE) Price Index data.
Gold price technical analysis: Daily chart
In the daily chart, XAU/USD trades at $4,053.13, maintaining a bearish near-term bias as spot holds beneath all the major simple moving averages (SMAs). The 21-day SMA at $4,073.46 forms immediate overhead resistance, while the 50-day, 100-day and 200-day SMAs at $4,193.29, $4,435.77 and $4,490.68 respectively reinforce a broader topside cap. The Relative Strength Index (14) at 46.00 sits just below neutral territory, hinting at subdued downside momentum rather than an outright oversold condition.
On the topside, initial resistance is seen at the 21-day SMA around $4,073, followed by the 50-day SMA near $4,193. Above these, the 100-day SMA at roughly $4,436 and the 200-day SMA close to $4,491 outline a dense medium-term barrier that gold would need to reclaim to shift the technical tone. With no clearly defined nearby support levels in the dataset, any retest of recent lows would likely leave price action driven by momentum and order flow until a fresh structural base emerges.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Fed FAQs
Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback.
The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions. The FOMC is attended by twelve Fed officials – the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who serve one-year terms on a rotating basis.
In extreme situations, the Federal Reserve may resort to a policy named Quantitative Easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used during crises or when inflation is extremely low. It was the Fed’s weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy high grade bonds from financial institutions. QE usually weakens the US Dollar.
Quantitative tightening (QT) is the reverse process of QE, whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing, to purchase new bonds. It is usually positive for the value of the US Dollar.
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.
