Gold Price Forecast: XAU/USD set to remain volatile, but within range amid Mideast uncertainty

Gold is nursing losses below $4,500 early Tuesday after correcting over 1% from two-week highs of $4,595 set on Monday.

Gold struggles amid Mideast tensions

Despite the recent pullback, Gold remains stuck within a familiar range as the ongoing peace negotiations between the United States (US) and Iran offer some comfort to buyers on one hand.

Meanwhile, on the other hand, continued hostilities between Israel and Lebanon thwart the ceasefire arrangement in the Middle East, keeping the haven demand intact for the US Dollar (USD).

US President Donald Trump told ABC News on Tuesday that he thinks there will be a deal with Iran to extend the ceasefire and reopen the Strait of Hormuz “over the next week,“ according to a post from the outlet on X.

In contrast, the Iranian state media reported on Monday that Tehran had suspended message exchanges with Washington amid Israel’s continued assault on Lebanon.

The Israeli military said it has intercepted two rockets launched from Lebanon into Israeli territory. This came after Hezbollah claimed several attacks on Israeli targets in south Lebanon late on Monday, even after Trump said the Iran-backed militia had agreed that “all shooting will stop”.

Further, the latest downtick in Oil prices, following the conciliatory remarks from Trump, helps limit the downside in Gold for now.

However, no signs of an end to the Israel-Lebanon conflict could put the US-Iran peace negotiations in danger, which will likely reinforce fresh selling interest in the bright metal.

Gold also remains vulnerable amid increased hawkish bets on the US Federal Reserve (Fed) interest rate outlook, as inflation concerns persist and oil prices remain elevated.

The Greenback also remains supported by strong US ISM PMI data released on Monday, which showed the headline Manufacturing PMI rose to 54 in May from 52.7 in April.

Looking ahead, Mideast headlines will continue to drive risk sentiment and the dynamics of USD and Gold price action, while traders will also await the release of JOLTS Job Openings data for a fresh take on the state of the US labor market before Friday’s Nonfarm Payrolls (NFP) showdown.

Gold price technical analysis: Daily chart

In the daily chart, XAU/USD trades at $4,481.09, keeping a bearish near-term bias as price holds under a stack of declining moving averages. Spot remains capped beneath the 21-day simple moving average (SMA) at roughly $4,578.92 and the 50-day SMA near $4,629.55, while the longer-term 100-day SMA around $4,800.84 and a broader downward resistance trend line overhead reinforce the medium-term downtrend. The 14-day Relative Strength Index (RSI) at 41.62 sits below the neutral 50 line, hinting that downside pressure still outweighs buying interest despite the proximity to longer-term support.

On the downside, initial support is offered by the 200-day SMA at $4,416.65, where buyers could attempt to stabilize the decline; a clean break under this level would likely expose a deeper corrective phase. On the topside, bulls would first need to reclaim the 21-day SMA at $4,578.92, with the 50-day SMA at $4,629.55 acting as the next barrier; only a sustained recovery toward the 100-day SMA around $4,800.84 and above the descending trend line would meaningfully challenge the prevailing bearish structure.

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