Gold Price Forecast: XAU/USD recovers modestly despite intensifying Middle East crisis

XAU/USD Current price: $5,146

• Stocks trade with a better tone as panic recedes despite continued Middle East tensions.
• US encouraging macroeconomic data added to the improved market mood.
• Gold found some intraday demand; near-term downside risk prevails.

Spot Gold bounced from its weekly low and trades with modest gains on Wednesday, still confined to the lower end of its weekly range. Despite the Middle East crisis continuing to intensify, financial markets seem to have dropped panic, and speculative interest moves with modest caution. Nevertheless, hopes that the war will soon come to an end dilute as days go by.

European and American indexes managed to regain the green, albeit gains are modest. Still, enough to put a halt to the US Dollar (USD) rally. The Greenback pulled back after rallying on risk-aversion in the first two days of the week, preserving, however, a good chunk of its weekly gains. Steady oil prices help to underpin the mood.

United States (US) data limited the USD slide, as the ADP Employment Change report showed that the private sector added 63K new jobs in February, better than the 50K anticipated by market participants. Additionally, the ISM Services Purchasing Manager’s Index (PMI) improved to 56.1 in February, much better than the expected 53.5 and surpassing the previous 53.8. On a down note, S&P Global downwardly revised its September Services PMI from an initial estimate of 52.3 to 51.7, still well into expansionary levels.

Meanwhile, US Treasury Secretary Scott Bessent said that global tariffs of 15% recently announced by President Donald Trump are likely to come into effect this week. There were some market talks suggesting the EU expected to be exempted from these higher levies, amid the recent agreement with the White House.

Data-wise, Thursday will bring little of relevance, with the focus on the US Nonfarm Payrolls (NFP) report scheduled for Friday.

XAU/USD short-term technical outlook

In the 4-hour chart, the near-term bias for XAH/USD is bearish as price extends its retreat well below the 20-period Simple Moving Average (SMA) near $5,253.00, while still holding above the rising 100- and 200-period SMAs clustered around $5,100.00–$5,040.00. The short-term average has started to roll over, signalling fading upside momentum after the failed push above $5,400.00 earlier in the week. The Momentum indicator sits below 0 and remains negative, reflecting dominant selling pressure. The Relative Strength Index (RSI) indicator aims lower at around 42, indicating a shift from bullish to corrective conditions rather than outright capitulation.

Initial support is seen around the 100-period SMA at $5,100.00, with a deeper floor emerging near the 200-period SMA around $5,040.00 if sellers extend control. On the upside, immediate resistance aligns first with the 20-period SMA near $5,253.00, where a recovery would face its first test. A break above that barrier would expose the recent consolidation highs around the $5,300.00 area, while the record high at $5,598.25 remains a distant cap and only comes into play if buyers regain strong momentum.

In the daily chart, XAU/USD retains a mildly bullish tone as spot holds above the rising 20-day SMA near $5,070, which in turn stands well above the ascending 100- and 200-day SMAs, confirming a positive broader trend backdrop. Price has recovered from last week’s dip toward $4,850 and is rebuilding upside traction, while the Momentum indicator remains above 0 and turns higher, indicating renewed buying pressure after a brief loss of steam. Finally, the RSI indicator hovers in the mid-50s, reinforcing a bullish tilt without confirming higher highs ahead.

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