Gold Price Forecast: XAU/USD unstoppable rally continues with no roof at sight

XAU/USD Current price: $5,092

• Concerns about a United States- Japan intervention of the Japanese Yen hit the US Dollar.
• The Federal Reserve will announce its monetary policy decision this week.
• XAU/USD briefly surpassed $5,100 aims to extend its advance despite overbought conditions.

Spot Gold kept rallying into unexplored territory on Monday, briefly surpassing the $5,100 threshold before pulling back some. The XAU/USD pair is comfortable around $5,090 at the time of writing, paring gains amid the good performance of Wall Street.

The US Dollar (USD) collapsed at the weekly opening on headlines indicating that the United States (US) Federal Reserve (Fed) was asking New York banks about the USD/JPY’s exchange rate. Financial markets understood such an action as a first step into a US-Japan intervention of the Japanese Yen (JPY). The pair plummeted and resulted in a widespread USD sell-off, with the battered American currency also affected by persistent geopolitical drama and uncertainty.

On the one hand, market participants await the US President Donald Trump's nominee to run the Fed once Jerome Powell’s mandate finalizes in May. Given that the Fed is scheduled to announce its decision on monetary policy next Wednesday, investors lifted bets on a soon-to-come announcement from President Trump to overshadow the Fed’s announcement, largely expected to be no changes to the current interest rate.

On the other hand, tensions between the US and Europe remain the same, despite Trump announcing the framework of a deal over Greenland. The EU has paused the approval of a trade deal with the US, and there has been mounting speculation that the Old Continent can use its Anti-Coercion Instrument (ACI), a mechanism that enables restrictions on the physical imports and exports of goods across EU borders, which could even be extended to services. Additionally, the EU holds about $8 trillion of US Treasury bonds, which can be used as leverage against Trump threats.

In an uncertain world, buying Gold is the number one defense.

XAU/USD short-term technical outlook

In the 4-hour chart, XAU/USD is poised to extend its advance. The 20-period Simple Moving Average (SMA) rises above the 100 and 200 SMAs, with all three trending higher, underscoring the positive bias. The 20 SMA at $4,949.47 offers dynamic support. At the same time, the Momentum indicator holds above its midline but has lost strength, while the Relative Strength Index (RSI) indicator has flattened around 81. Extreme near-term overbought conditions are likely to be ignored by market players, with another leg north likely after a period of consolidation.

In the daily chart, XAU/USD is up for a sixth consecutive day. From a technical perspective, the risk skews to the upside, as technical indicators advance far above their midlines, without signs of upward exhaustion. At the same time, the 20-day SMA heads north almost vertically, far above the 100- and 200-day SMA, while way below the current level.

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