Gold sticks to modest gains above $4,550 as traders assess prospects of Iran ceasefire

Gold (XAU/USD) moves further away from a one-and-a-half-week high, touched earlier this Tuesday, and trades just above the $4,550 level during the first half of the European session, still up for the third straight day. Reports that US President Donald Trump is willing to wind down the military campaign against Iran, even if the Strait of Hormuz remains largely closed, trigger a corrective pullback in Crude Oil prices. This, in turn, eases inflation concerns and keeps US Treasury bond yields on the back foot, prompting some US Dollar (USD) profit-taking and benefiting the commodity.

Meanwhile, Iran has signaled reluctance to engage in direct negotiations with the US, highlighting fragile diplomatic progress. Furthermore, the US is still deploying additional troops and assets to the region, adding to uncertainties and dampening hopes for a quick de-escalation of tensions in the Middle East. This should act as a tailwind for Crude Oil prices and keep inflation risks in play, bolstering bets for higher interest rates globally. Expectations for hawkish central banks, including the US Federal Reserve (Fed), cap gains for the non-yielding Gold.

Traders now seem to have fully priced out the possibility of any further rate cuts by the US central bank and rapidly increasing bets for a hike by the end of this year. The outlook, in turn, backs the case for the emergence of dip-buying around the USD, which, in turn, contributes to keeping a lid on the Gold price. Hence, it will be prudent to wait for strong follow-through buying before positioning for an extension of the recent solid recovery from the 200-day Simple Moving Average (SMA), around the $4,100 mark, or a four-month low, touched last week.

Traders now look to the US economic docket – featuring the release of JOLTS Job Openings data and the Conference Board's Consumer Confidence Index. This, along with speeches by influential FOMC members, will drive the USD and provide some impetus to the Gold price. The market focus, however, remains glued to geopolitical developments, which will continue to play a key role in infusing volatility around the XAU/USD pair.

XAU/USD daily chart

Gold bears have the upper hand while below 100-day SMA support breakpoint

From a technical perspective, the near-term bias is cautiously bearish as the Gold price hovers just under the 38.2% Fibonacci retracement of the fall from the monthly swing high. Moreover, the precious metal trades beneath the 100-day Simple Moving Average (SMA), suggesting the broader uptrend is intact but under pressure in the short term. Moreover, the 200-day SMA continues to grind higher, reinforcing longer-term bullish structure despite the pullback.

Meanwhile, the Relative Strength Index (RSI) has recovered from oversold territory to around 41, indicating easing but still subdued upside momentum. Furthermore, the Moving Average Convergence Divergence (MACD) remains below zero with negative readings, consistent with a fading bullish impulse.

Initial resistance stands at the 38.2% Fibo. retracement at $4,592.49, with the 100-day SMA near $4,637 forming the next barrier. A daily close above the latter would open a recovery toward the 50.0% retracement at $4,747.16.

On the downside, immediate support is seen near the recent lows around $4,470, ahead of the 23.6% retracement at $4,401.11, where prior price congestion aligns with the corrective structure. A break below $4,401.11 would expose the $4,200–4,150 region and bring the rising 200-day SMA at $4,129 into focus as deeper trend support.

As long as price holds above the 23.6% retracement and the 200-day SMA, the broader bullish framework survives, but failure there would reinforce the current bearish near-term bias.

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