Gold Price Forecast: XAU/USD drifts below $4,100, but bears start to look exhausted
- Gold drifts below $4,100, but remains within last week's trading range.
- Geopolitical tensions have failed to lift the safe-haven US Dollar this time.
- A bullish divergence in RSI studies suggests that the bearish trend might have reached a bottom.
Gold (XAU/USD) extends losses on Monday, with price action drifting below the $4,100 line, amid a risk-off market mood, as tensions between the US and Iran flare. From a wider perspective, however, the precious metal remains within previous ranges, with momentum indicators hinting at fading bearish pressure.
The Yellow metal came under renewed pressure at the week's opening as US and Iran ramped up their hostilities over the weekend. Beyond that, Tehran announced the closure of the key Strait of Hormuz, sending Oil prices higher and pressuring global central banks to hike interest rates further. This boosts treasury yields and weighs on the yieldless Gold.
The US Dollar (USD), however, has failed to draw support from the risk-averse market. The USD Index, which measures the value of the Greenback against a basket of peers, nurses mild losses as investors await the release of the US Consumer Price Index (CPI) report due on Tuesday, and the testimony of Federal Reserve (Fed) Chairman Kevin Warsh to Congress, to confirm market expectations of upcoming rate hikes.
Technical Analysis: Bullish divergence on RSI studies
XAU/USD trades at $4,061, keeping a capped bias as it holds below the downward resistance trendline yet with a bullish divergence on the daily RSI, which is trending towards neutral levels. The Moving Average Convergence Divergence (MACD) is also turning positive, suggesting that bears might have lost steam.
Bulls, however, should break above the trendline resistance, now at $4,150 and last week's trading top, at the $4,200 area, to invalidate the descending wedge pattern and aim for mid-June highs around $4,380 and late May highs around $4,600.
On the downside, the pair has a cluster of supports between the July 9 low in the $4,020 area and the late October 2025 lows near $3,885. Further down, the 127.2% Fibonacci extension of the late-June downleg is at the $3,835 area.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.12% | 0.06% | 0.24% | -0.18% | 0.08% | -0.40% | 0.03% | |
| EUR | 0.12% | 0.18% | 0.35% | -0.06% | 0.21% | -0.25% | 0.16% | |
| GBP | -0.06% | -0.18% | 0.20% | -0.25% | 0.05% | -0.41% | 0.02% | |
| JPY | -0.24% | -0.35% | -0.20% | -0.43% | -0.16% | -0.61% | -0.17% | |
| CAD | 0.18% | 0.06% | 0.25% | 0.43% | 0.28% | -0.16% | 0.27% | |
| AUD | -0.08% | -0.21% | -0.05% | 0.16% | -0.28% | -0.42% | 0.01% | |
| NZD | 0.40% | 0.25% | 0.41% | 0.61% | 0.16% | 0.42% | 0.44% | |
| CHF | -0.03% | -0.16% | -0.02% | 0.17% | -0.27% | -0.01% | -0.44% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
Author
Guillermo Alcala
FXStreet
Graduated in Communication Sciences at the Universidad del Pais Vasco and Universiteit van Amsterdam, Guillermo has been working as financial news editor and copywriter in diverse Forex-related firms, like FXStreet and Kantox.
