Gold Price Forecast: XAU/USD sellers fight back as US-Iran tensions re-ignite

Gold is back in the red at the start of the week on Monday, flirting with the $4,800 barrier, following an impressive rally witnessed on Friday.  

Gold suffers from USD resurgence

Gold has come under intense selling pressure this Monday, as tensions between the United States (US) and Iran re-escalated over the weekend, which now risks violation of the two-week ceasefire that expires on April 22. The re-escalation over the Strait of Hormuz issue has revived the safe-haven demand for the US Dollar (USD).

In a social media post on Sunday, US President Donald Trump announced that an “Iranian-flagged cargo ship named TOUSKA” tried to get past the US naval blockade, “and it did not go well for them”.

The continued US naval blockade and the seizure of the Iranian cargo drew a negative response from Iran.

A spokesperson for the military’s central command centre, Khatam Al-Anbiya, noted: “We warn that the armed forces of the Islamic Republic of Iran will soon respond and retaliate against this armed piracy and the US military.”

Iranian state media also reported that Tehran had rejected new peace talks, citing the ongoing blockade, despite Trump confirming that the negotiations with Iran will take place on Monday. 

The Greenback also gains recovery momentum amid a resurgence in the Oil price rally, which stokes inflationary concerns and boosts hawkish expectations around the US Federal Reserve’s (Fed) interest rate outlook. This bodes ill for non-yielding assets such as Gold.

On Friday, the USD witnessed a sharp retracement from seven-week highs amid risk recovery, which fuelled a solid Gold price rebound. This happened after Iran’s foreign minister declared the Strait of Hormuz open to all commercial ships during the ceasefire between Israel and Lebanon.

Amid a fast-changing situation in the US-Iran conflict, it remains to be seen if Iran retaliates or signs up again for the peace talks. In either case, volatility is set to remain high and keep the Gold price subject to wild swings.  

Beyond geopolitics, the focus this week also remains on Fed Chair-designate Kevin Warsh’s testimony due on Tuesday, as he testifies on his nomination as the Fed Chair before the Senate Committee on Banking, Housing, and Urban Affairs, in Washington DC.

Also of note will be the US March Retail Sales report and the preliminary business PMI data for April.

Meanwhile, Gold’s technical setup on the daily chart also appears interesting, leaving all eyes on technicals alongside geopolitics.

Gold price technical analysis: Daily chart

In the daily chart, XAU/USD trades at $4,798.65. The metal has reclaimed a constructive stance above the short- and medium-term baselines, with price holding over the 21-day simple moving average (SMA) at $4,654.94 and the 100-day SMA at $4,721.39, while remaining capped only by the 50-day SMA at $4,894.89 higher up. The break above the former descending resistance line, which now offers support around $4,775.64, hints at a nascent bullish bias, while the Relative Strength Index (RSI) near 52 suggests neutral but stabilizing momentum after the recent pullback.

On the downside, initial support is seen at the reclaimed descending trend line near $4,775.64, followed by the 100-day SMA at $4,721.39 and the 21-day SMA at $4,654.94, with the original rising trend line further down around $4,586.37; the 200-day SMA at $4,223.02 remains a distant bullish line in the sand. On the topside, a sustained advance would need to clear the 50-day SMA at $4,894.89 to open the way for a more decisive extension of the recovery phase.

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