Gold Price Forecast: XAU/USD struggles to recover its long-term momentum

XAU/USD Current price: $4,708

• Hopes for a resolution in the Middle East conflict boosted the market's mood.
• The US Dollar gained some ground on the back of encouraging local data.
• XAU/USD extends its recovery beyond $4,700, buyers gain impulse.

Spot Gold advances for a third consecutive day, hitting an intraday high of $4,765 before retreating some. The US Dollar (USD) spent the first half of the day on the back foot amid hopes that the United States (US) and Iran are progressing toward ending the conflict that has frozen the Middle East. According to the latest headline, Iran is still reviewing the US proposal via Pakistani mediators, not much new to report there, still enough to maintain financial markets in risk-on mode.

The situation around the Middle East remains the same in the American session, yet the poor performance of Wall Street helped the Greenback trim part of its early losses. XAU/USD holds on to modest intraday gains around $4,710.

The USD also benefited from upbeat local data, as Initial Jobless Claims rose by 200K in the week ended May 2, better than the 205K expected, while Q1 Unit Labor Cost was up 2.3% according to preliminary estimates, easing from the previous 4.4%. U.S. employment-related data is relevant ahead of the Nonfarm Payrolls (NFP) report scheduled for Friday. The report is expected to show the economy added 62K new job positions in April, while the Unemployment Rate is forecast to remain steady at 4.3%.

XAU/USD short-term technical outlook

The near-term picture for XAU/USD is bullish on the 4-hour chart. The price remains comfortably above the 20-, 100-, and 200-period Simple Moving Averages (SMAs). The metal is extending its advance after reclaiming and stretching away from the 100-period SMA near $4,686.75, while the 200-period SMA at roughly $4,661.88 underpins the broader uptrend. Finally, the shorter moving average gains upward traction below the longer ones, indicating increased buying interest but not enough to confirm a steady advance.

The same chart shows that the Momentum indicator eases from overbought readings, heading lower yet still within positive levels, while the Relative Strength Index (RSI) indicator posts a similar behavior and stands around 63. Overall, indicators reflect the ongoing corrective decline without confirming additional slides ahead.

On the downside, initial intraday support is seen at the recent price area around $4,700, ahead of the 100-period SMA at $4,686.75. A deeper pullback would then expose the 200-period SMA at approximately $4,661.88, with the 20-period SMA, now trailing lower near $4,631.96, acting as a more distant dynamic floor. The intraday top converges with the 100-day SMA, a critical threshold to beat to confirm a bullish extension ahead of the weekly close.

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