Gold Price Forecast: XAU/USD challenging a critical support

XAU/USD Current price: $4,482

• The market’s sentiment continues to see-saw according to Middle East headlines.
• United States employment-related data came in softer than anticipated.
• XAU/USD bounced from a critical dynamic support, risk skews to the downside.

Spot Gold retreated sharply from an early peak of $4,515, holding on to modest intraday gains in the $4,480 region in the American session. The bright metal advanced throughout the first half of the day amid optimism related to the Iran war, which, however, faded as the day went by. If something, the strong momentum in stocks, led by the tech sector, maintained the US Dollar (USD) advance at check.

When it comes to the Middle East war, early headlines indicated that Israel and Lebanon reached an understanding for a full ceasefire, Tehran's initial condition for an end to the war with the US. The agreement was conditioned on Hezbollah's acceptance, which, later in the day, rejected the outcome of the Lebanon-Israel direct talks.

Further denting optimism about a conflict resolution, Iran’s foreign minister, Abbas Araghchi, noted that “no tangible progress” has been made in negotiations to end the war. United States (US) President Donald Trump said they are in the midst of the “final negotiations” to end the conflict, but his words were once again ignored.

Beyond war headlines, market players also assessed US employment data ahead of the release of the May Nonfarm Payrolls (NFP) scheduled on Friday. Challenger Job Cuts in the same month showed that

US-based employers announced 97,006 job cuts in May, up 16% from the 83,387 job cuts recorded in April, and up 3% from the 93,816 announced in the same month last year. Additionally, Initial Jobless Claims for the week ending May 30 increased to 225K, worse than the previous week’s 212K. The NFP report is expected to show that the country added 85K new jobs in the month, while the Unemployment Rate is foreseen steady at 4.3%.

XAU/USD short-term technical outlook

In the daily chart, XAU/USD holds a modest bearish bias as it sits below the 20-day Simple Moving Average (SMA) at roughly $4,557 and well under the 100-day SMA near $4,798, while remaining only modestly above the 200-day SMA around $4,427. The pair has been steadily bouncing from the latter, having held above the dynamic support since October 2023. A clear break below the 200-day SMA could be the initial step towards a steeper decline. The same chart shows that technical indicators remain below their midlines, although losing their downside strength. A recent low at $4,366 comes next in the near term.

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