Gold rebounds from two-month low US Dollar eases on fresh US-Iran truce headlines

Gold (XAU/USD) stages a rebound on Thursday as the US Dollar (USD) edges lower following fresh headlines surrounding a potential US-Iran peace deal and softer US inflation data. At the time of writing, XAU/USD is trading around $4,480 after hitting an intraday low of $4,366 earlier in the day, its lowest level in two months.

Axios reported on Thursday that the US and Iran have reached a preliminary 60-day agreement to extend the current truce, though the deal still awaits final approval from US President Donald Trump. This comes after US armed forces carried out a second “defensive” strike this week on Iranian military facilities. In response, Iran’s Islamic Revolutionary Guard Corps (IRGC) claimed it targeted a US airbase in the Gulf region and warned of “more decisive” action if US “aggression” continues, according to state media.

On the data front, the core PCE Price Index, the Federal Reserve’s (Fed) preferred inflation gauge, rose 0.2% MoM in April, below market expectations and down from the 0.3% increase recorded in March. On a yearly basis, the Core PCE climbed to 3.3%, up from 3.2% in March and in line with analyst forecasts.

The US Dollar Index (DXY), which tracks the Greenback’s value against a basket of six major currencies, is trading around 99.00, easing after hitting a seven-week high of 99.54 earlier in the day.

Although negotiations continue to face hurdles over Iran’s nuclear program and control of the Strait of Hormuz. Tehran is also pushing for sanctions relief and the release of frozen Iranian assets. US President Donald Trump told PBS News on Wednesday that Iran would not receive sanctions relief in exchange for giving up highly enriched uranium.

Until a final agreement is reached, downside in the US Dollar appears limited. Traders continue to favor the US Dollar (USD) over Gold as a safe-haven asset. The metal has remained on the back foot since the war began in late February, as markets increasingly focus on inflation risks stemming from rising Oil prices.

Higher energy costs are adding to inflationary pressures, heightening expectations that major central banks, including the Fed, may need to keep interest rates higher for longer or even raise them. As a result, US Treasury yields remain elevated, reducing the appeal of non-yielding assets such as Gold.

Fed Vice Chair Philip Jefferson said on Thursday that rising energy prices are “a downside risk to growth” and “a potential inflation driver.” He added that the Fed remains “firmly committed to restoring inflation to 2%” and noted that recent US economic activity “remains robust.”

Technical Analysis: Bears retain control below key moving averages

XAU/USD bounces off the 200-day Simple Moving Average (SMA) at $4,399 while remaining below the 50-day and 100-day SMAs, keeping the broader bearish outlook intact.

The Relative Strength Index (RSI) hovers near 40 and the Moving Average Convergence Divergence (MACD) remains in negative territory, which together suggest limited upside momentum and leave rallies vulnerable while the metal trades under the higher moving average.

On the topside, initial resistance is seen at the 50-day SMA around $4,630 ahead of the 100-day SMA near $4,801 and only a sustained break above this barrier would ease the current bearish pressure.

On the downside, the 200-day SMA near $4,399 acts as the first meaningful support zone, where a break would expose deeper losses and reinforce the broader corrective phase.

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