Gold price rebounds as US-Iran conflict revives safe-haven demand

Gold (XAU/USD) prices posted a slight recovery as renewed geopolitical tensions increased demand for safe-haven assets. The conflict between the United States and Iran remained the main driver of market sentiment, while expectations of tighter US monetary policy continued to support the US Dollar. At the same time, gold approached a key technical resistance level, keeping attention on whether the current rebound can extend further. Market participants continued to monitor developments between the United States and Iran while assessing the Federal Reserve's policy outlook.

Gold price holds firm as US-Iran tensions boost safe-haven demand

Gold prices posted a modest rebound as renewed geopolitical tensions supported safe-haven demand. The US military continued its strikes against Iranian targets, while Iran responded with retaliatory attacks on US military bases and allied infrastructure across the Gulf region. These developments kept geopolitical risks elevated and supported demand for gold as a traditional safe-haven asset.

At the same time, comments from US Secretary of State Marco Rubio helped ease some market concerns. Rubio stated that the United States remained open to diplomatic talks with Iran despite the ongoing military actions. The possibility of renewed negotiations reduced safe-haven demand and limited gold's upside despite elevated geopolitical tensions.

Meanwhile, expectations of tighter US monetary policy continued to support the US Dollar. Disruptions to oil shipments through the Strait of Hormuz and the Houthi blockade against Saudi Arabia raised concerns about higher energy prices and inflation. This strengthened expectations that the Federal Reserve could keep policy restrictive for longer. CME FedWatch data shows an 83% probability of a US rate hike by year-end. Higher rate expectations supported the Dollar and limited gold's upside.

Gold price forecast: XAU/USD faces critical resistance after wedge rebound

The gold chart below shows a long-term descending wedge that has guided price action for several months. Both the upper resistance line and the lower support line continue to contain price movement. The recent decline respected the lower boundary once again and triggered a modest rebound. This reaction confirms that the support trendline remains active. At the same time, the wedge continues to narrow as price approaches the apex.

The latest recovery has lifted gold away from the lower boundary of the pattern. However, price still trades below the descending resistance trendline. Previous rallies have repeatedly stalled near this level, confirming that it remains a strong technical barrier. A sustained break above the upper trendline would weaken the bearish structure and improve the short-term technical outlook.

The narrowing wedge suggests that a larger directional move may be approaching. A breakout above resistance could signal strengthening bullish momentum and increase the probability of a broader recovery. On the other hand, a confirmed break below the lower boundary would invalidate the pattern and expose gold to deeper losses. Until either level breaks, the descending wedge remains the dominant technical structure.

Gold outlook: US-Iran tensions and Fed outlook shape the next move

Gold remains caught between supportive geopolitical risks and pressure from expectations of tighter US monetary policy. Developments between the United States and Iran will likely continue to influence safe-haven demand, while the Federal Reserve's policy outlook will remain an important driver of the US Dollar. Technically, gold has recovered from the lower boundary of its descending wedge but continues to trade below key resistance. A break above the upper trendline could strengthen the recovery, while a break below support could trigger a deeper correction. Until then, the descending wedge remains the dominant technical pattern.