XAU/USD Price forecast: Gold maintains the upside pressure above $4,400

XAU/USD Current price: $4,423

• The US Dollar trades on the back foot amid reduced hopes of interest rate hikes.
• The United States and Iran are working to extend the truce by 60 more days.
• XAU/USD maintains upward pressure near August highs.

Gold price kicked off the week, maintaining upward pressure, trading not far below the $4,400 mark. The US Dollar (USD) remains vulnerable after United States (US) data released throughout August weighed down the odds for a Federal Reserve (Fed) interest rate hike in September.

The latest available US data came in on Friday, showing Retail Sales contracted 0.6% MoM in July, while Consumer Sentiment, as measured by the University of Michigan, fell to 51 in August from 55.2 in the previous month. But beyond these figures, market participants weigh the poor July employment report and the fact that inflation in the same month was in line with expectations.

What also weighed on speculative interest was the latest Fed meeting, in which Chair Kevin Warsh dodged a question about how he plans to fight inflation without raising rates. The Federal Open Market Committee (FOMC) will release the minutes of the July meeting on Wednesday, although the document will hardly shed light on future action.

Meanwhile, market talk suggests Iran and the US are willing to extend the ceasefire in the Middle East for 60 more days. Still, headlines also indicate that Iran shifted its defensive stance to a fully offensive one, a senior official told Reuters. Oil prices showed no reaction to the news, with the barrel of West Texas Intermediate (WTI) hovering around $81.

XAU/USD short-term technical outlook

In the four-hour chart, XAU/USD maintains a constructive bullish bias as it holds comfortably above the short-term 20-period Simple Moving Average (SMA) at roughly $4,383.06, with the 100-period and 200-period SMAs rising well below price near $4,212.86 and $4,145.95 respectively, reinforcing a broader uptrend structure. Momentum conditions remain supportive, with the 14-period Relative Strength Index (RSI) indicator hovering around 61 and the 14-period Momentum indicator advancing in positive territory, both suggesting ongoing upside pressure rather than an imminent reversal.

In the daily chart, XAU/USD is also bullish. The metal holds above the 100-day SMA at $4,386.20 and extends its advance well beyond the 20-day SMA at $4,195.52, indicating firm underlying demand on dips. Momentum remains positive, with the 14-period RSI hovering near 66 and the Momentum indicator also in positive territory, which suggests buyers retain control

On the downside, initial support is seen at the 20-period SMA around $4,383.06, where a pullback could find buyers to protect the immediate bullish structure. A deeper retreat would expose the next layers of demand at the 100-period SMA near $4,212.86 and then the 200-period SMA around $4,145.95, levels that would need to give way to threaten the prevailing uptrend. On the topside, the next notable hurdle emerges at the 200-day SMA around $4,506.84, where a sustained break would open the door to a more pronounced bullish extension.

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