XAU/USD Price forecast: Gold stuck just above $4,000

XAU/USD Current price: $ 4,014

• Mounting Middle East tensions fuel demand for the American dollar.
• Inflation takes center stage as different economies will update data.
• XAU/USD offers a neutral-to-bearish bias in the near term.

War drums sound loud at the start of the new week, as Iran and the United States (US) exchanged fire for the ninth consecutive day on Sunday, leading to a firmer US Dollar (USD) and a bullish gap in Oil prices. Gold suffered a minor setback and fell towards $3,982 a troy ounce during Asian trading hours, later recovering to the $4,010 price zone.

The Middle East war is the main market mover amid a new closure of the Strait of Hormuz and tit-for-tat attacks, also affecting neighboring countries. Despite headlines indicating a 10-day ceasefire, concerns maintain the USD strong across the FX board in the American afternoon, and the XAU/USD pair stuck around its daily opening.

Other than that, the week will revolve around inflation data, as releases are scheduled among major economies. Canada reported on Monday that the Consumer Price Index (CPI) rose 2.8% on a yearly basis, easing from the 3.2% increase recorded in May. The Bank of Canada’s (BoC) preferred core measure rose 2.1% YoY, slightly below the 2.2% increase from the previous month. New Zealand and the United Kingdom (UK) are the next to report.

XAU/USD short-term technical outlook

In the four-hour chart, XAU/USD retains a bearish near-term bias as it sits below the 20-period Simple Moving Average (SMA) at $4,015.72, the 100-period SMA at $4,068.48 and the 200-period SMA at $4,143.74. The layered overhead averages hint that recent rebounds remain corrective within a broader pullback. The 14-period Momentum indicator has turned slightly positive, but remains around its midline, while the Relative Strength Index (RSI) indicator heads nowhere at 46, suggesting selling pressure is moderating rather than reversing.

In the daily chart, XAU/USD is also bearish, as spot holds well below the 20-day, 200-day and 100-day SMAs. Price remains capped first by the 20-day SMA around $4,064.64, while the longer-term 200-day and 100-day SMAs near $4,495.72 and $4,523.46 respectively reinforce a broader topside supply zone. The RSI indicator holds around 40, while the 14-day Momentum indicator has turned marginally positive, yet only hints at a tentative pause within a still-depressed structure.

On the topside, initial resistance is located at the 20-period SMA at $4,015.72, followed by a more substantial barrier at the 100-period SMA near $4,068.48, while the 200-period SMA at $4,143.74 marks a wider recovery cap. The June monthly low at $3,941 provides relevant support ahead of the $3,000 threshold. A slide below the latter seems unlikely in the near-term, yet if the level gives up, selling pressure will likely accelerate.

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