XAU/USD Price Forecast: XAU/USD bounces, remains below $4,100

Valeria Bednarik FXStreet

XAU/USD Current price: $4,074

Resurgent Middle East tensions put fresh pressure on the precious metal.
XAU/USD neared $4,000 before recovering; risk is still skewed to the downside.

Spot Gold recovered from a fresh weekly low of $4,021, although it still trades in the red on a daily basis. Risk aversion took over financial markets amid fresh tensions in the Middle East. According to the Iranian state broadcaster IRIB, the Islamic Revolutionary Guards Corps (IRGC) hit US military facilities in Bahrain and Kuwait in response to American strikes.

In response to the fire exchange, United States (US) President Trump said the Memorandum of Understanding (MoU) was over and threatened to hit Tehran, adding that, if necessary, he would strike electricity and water plants. Later in the day, President Trump somewhat cooled concerns, noting that Iran wants to make a deal but “don’t know how.”

Resurgent tensions boosted Oil prices and the Greenback at the beginning of the day, although fears eased as the day progressed. Still, the USD retains gains while Wall Street remains in the red, reflecting fresh concerns.

In the meantime, market players await the latest Federal Open Market Committee (FOMC) meeting Minutes. The document is likely to have a limited impact on financial markets after Chair Kevin Warsh made it clear that he will not provide markets with forward guidance, while announcing plans to introduce changes to how the Fed collects and uses data.

XAU/USD short-term technical outlook

From a technical perspective, and according to the 5-hour chart, XAU/USD maintains a bearish near-term bias as it holds beneath the major moving averages. The 100-period Simple Moving Average (SMA) at $4,123.01, the 20-period SMA at $4,132.96, and the 200-period SMA at $4,255.50 all sit overhead. The Relative Strength Index (RSI) indicator bounced from its lows but stands at around 43, while the Momentum indicator offers a similar behavior, reinforcing fading buying pressure after the recent pullback.

In the daily chart, XAU/USD is also bearish as spot holds below the 20-day SMA at $4,140.60 and well under the longer-term 200-day and 100-day SMAs at $4,491.04 and $4,610.76, respectively. The Relative Strength Index (RSI) at 40.84 stays below its midline while the 14-day Momentum reading remains negative, which together hint that downside pressure persists despite some loss of intensity compared with earlier oversold extremes.

On the topside, immediate resistance is located at the 100-period SMA at $4,123.01, followed by the short-term barrier at the 20-period SMA near $4,132.96, with a stronger hurdle emerging at the 200-period SMA at $4,255.50. The $4,000 mark comes as immediate support, followed by the recent multi-month low at $3,941.

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

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

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