Gold (XAU/USD) recovered a large portion of its intraday decline and moved closer to the $4,400 level during Tuesday’s European session. However, the overall recovery still looks weak. Ongoing tensions involving Iran continue to raise inflation concerns, reducing expectations for interest rate cuts. This situation creates pressure on gold, which does not offer yields. At the same time, a stronger US Dollar is also limiting further upside.
Iran has denied any negotiations with the United States to end the conflict, pushing back against comments from US President Donald Trump, who suggested a deal might be close. Iranian officials have also indicated that the conflict will continue until full compensation is received. Meanwhile, pressure on Iran’s energy infrastructure and disruptions around the Strait of Hormuz have supported oil prices. Rising oil prices are increasing concerns about global inflation, which may force central banks to consider higher interest rates again. This keeps gold under pressure for the tenth consecutive day.
At the same time, markets have almost ruled out further rate cuts by the US Federal Reserve and are now expecting a possible rate hike later this year. This shift has pushed US Treasury yields higher and supported the US Dollar, leading investors to move away from gold. Still, ongoing geopolitical tensions are preventing a sharp drop in gold prices, as safe-haven demand remains in place. Traders are now focusing on upcoming global PMI data for short-term trading opportunities.
Technical outlook: key levels in focus
From a technical perspective, last week’s break below the 100-day moving average signaled strong bearish momentum. However, gold found support near the 200-day moving average around $4,100, which now acts as an important level.
The MACD indicator remains in negative territory and continues to show increasing selling pressure. Meanwhile, the RSI stands near 25, indicating oversold conditions. This suggests that while the trend is still bearish, a short-term bounce cannot be ruled out.
In the short term, the $4,305 level is immediate support. A break below this could push prices back toward $4,100. On the upside, resistance is seen near $4,650, followed by stronger barriers around $4,820 and the 100-day moving average near $4,610. A move above these levels would be needed to shift momentum and open the path toward $5,000.
