Gold prices (XAU/USD) continue to trade with a negative bias for the third consecutive day. However, the downside momentum remains limited, with prices moving within a broader range established in the previous session during Tuesday’s European trading hours. Market sentiment is being influenced by fading hopes of a last-minute agreement between the United States and Iran, as President Donald Trump’s deadline regarding the reopening of the Strait of Hormuz approaches.
The strengthening US Dollar is adding pressure on gold, benefiting from its safe-haven and global reserve currency status. At the same time, expectations of higher global interest rates are weighing on the non-yielding metal, making it less attractive to investors.
Market participants increasingly believe that rising energy prices, driven by geopolitical tensions, could reignite inflation. This scenario may push major central banks, including the US Federal Reserve, toward a more hawkish policy stance. Supporting this view, crude oil prices have surged to a four-week high following Trump’s intensified rhetoric against Iran, including threats targeting civilian infrastructure if no agreement is reached.
In response, Iranian officials have taken a firm stance. An advisor to Parliament Speaker Mohammad Bagher Ghalibaf stated that Iran will not back down, warning that failure to reach a deal could lead to severe consequences. This escalating tension in the Middle East continues to support elevated oil prices and adds uncertainty to global markets.
On the economic front, recent US data showed mixed signals. The ISM Services PMI dropped to 54 in March from 56.1, indicating a slight slowdown in growth. However, inflationary pressures remain strong, with the Prices Paid Index rising to 70.7. Combined with last week’s strong Nonfarm Payrolls (NFP) report, this reinforces expectations that the Federal Reserve may keep interest rates higher for longer. This outlook further strengthens the US Dollar and puts additional pressure on gold prices.
Technical Outlook: Gold Shows Bearish Bias
From a technical perspective, gold remains under mild bearish pressure. Prices are currently trading below the downward-sloping 200-period Simple Moving Average (SMA) on the 4-hour chart, signaling a weak trend.
The MACD indicator remains in negative territory, suggesting ongoing downside pressure, though momentum is not particularly strong. Meanwhile, the Relative Strength Index (RSI) is hovering around 49, indicating neutral momentum and a phase of consolidation within a broader bearish structure.
On the upside, immediate resistance is seen near $4,607, which aligns with the 38.2% Fibonacci retracement level of the recent decline. A break above this level could open the door toward $4,763, the 50% retracement level. However, as long as prices remain below these resistance levels and the 200-period SMA, upward moves are likely to face selling pressure.
On the downside, initial support is located around the $4,600 level. A break below this zone could push prices toward $4,416, the 23.6% Fibonacci retracement level, where buyers may attempt to stabilize the market.
