Gold Price Forecast: XAU/USD regains $4,100 despite Iran risks, ahead of Fed Minutes

Gold regains $4,100 early Wednesday, but fresh US-Iran tensions are likely to cap the rebound
The US Dollar stalls overnight sell-off amid Mideast concerns, ahead of Fed Minutes.
Gold buyers test the 21-day SMA near $4,140 on the road to recovery.

Dhwani Mehta FXStreet

Gold is fading in the tepid rebound above $4,100 early Wednesday, having reversed a part of the previous sell-off. Traders eagerly await the Minutes of the US Federal Reserve (Fed) June monetary policy meeting, due later in the day, for fresh trading impetus.

Gold: All eyes on US-Iran tensions, Fed Minutes

Gold has stalled its brief recovery stint heading into the European opening bell as the US Dollar (USD) seems to have found a floor, following the overnight sell-off.

The demand for the Greenback has returned as a haven alongside risk-off flows as markets face renewed tensions between the United States (US) and Iran.

The re-escalation of the Middle East conflict aids the turnaround in Oil prices from pre-war levels, reigniting inflation risks and tempering risk sentiment.

As cited by Reuters, “The US military unleashed a new wave of strikes against Iran on Tuesday and revoked a licence allowing the country to sell oil after three tankers were hit by projectiles in the Strait of Hormuz.”

In response, Iran's top negotiator, Mohammad Bagher Ghalibaf, accused the US of violating major terms of the memorandum of understanding (MoU) signed toward a ceasefire.

Meanwhile, the Iranian Islamic Revolutionary Guards Corps (IRGC) said on Wednesday that it “targeted 85 US military sites in Bahrain and Kuwait following the US ceasefire breach,” adding that it downed a US MQ9 drone in the country's south.”

Gold traders now look forward to the Fed’s June meeting Minutes for fresh insights into the central bank’s interest rate path, particularly after markets boosted expectations of a near-term rate hike, despite the recent weak US ISM Services PMI and Nonfarm Payrolls data.

Amid renewed US-Iran tensions and surging Oil prices, markets increased their bets for a September Fed rate hike to over a 63% chance, up from about 57% on Tuesday, according to the CME Group’s FedWatch tool.

In the meantime, Gold could take cues from the geopolitical developments around a tentative ceasefire violation.

Gold price technical analysis: Daily chart

In the daily chart, XAU/USD trades at $4,129.61, maintaining a bearish bias as spot holds beneath all the major moving averages. Price is slightly under the 21-day simple moving average (SMA) at $4,139.93, while the 50-day SMA at $4,373.87 and the longer-term 200-day and 100-day SMAs at $4,491.31 and $4,611.31 respectively reinforce a broad topside cap. The Relative Strength Index (14) at 44.41 sits below the neutral 50 mark, hinting at subdued bullish momentum rather than outright oversold conditions.

On the topside, initial resistance appears at the nearby 21-day SMA at $4,139.93, with the 50-day SMA at $4,373.87 forming a secondary barrier. Above these, the 200-day SMA at $4,491.31 and the 100-day SMA at $4,611.31 define a dense medium-term supply zone that would need to be reclaimed to ease the prevailing downside bias. With no clear structural supports highlighted in the current dataset, any further pullback would leave the metal vulnerable until fresh buying interest emerges ahead of those resistance levels.

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

Economic Indicator

FOMC Minutes

FOMC stands for The Federal Open Market Committee that organizes 8 meetings in a year and reviews economic and financial conditions, determines the appropriate stance of monetary policy and assesses the risks to its long-run goals of price stability and sustainable economic growth. FOMC Minutes are released by the Board of Governors of the Federal Reserve and are a clear guide to the future US interest rate policy.

Why it matters to traders?

Minutes of the Federal Open Market Committee (FOMC) is usually published three weeks after the day of the policy decision. Investors look for clues regarding the policy outlook in this publication alongside the vote split. A bullish tone is likely to provide a boost to the greenback while a dovish stance is seen as USD-negative. It needs to be noted that the market reaction to FOMC Minutes could be delayed as news outlets don’t have access to the publication before the release, unlike the FOMC’s Policy Statement.

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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