Gold (XAU/USD) is trading just higher in early Thursday European session, holding on to little gains after impressive a fresh monthly low in the early session. However the overall outlook remains careful. The US Dollar continues to adjust for the fourth direct day following a quite hawkish stance from the Federal Reserve. Ongoing tensions between the US and Iran have also pushed the Dollar to its highest level since 13 April which is keeping pressure on gold prices.
As scheduled the US central bank kept interest rates unchanged at 3.50%–3.75%. Still decision saw notable dispute, with three policymakers opposite the tone of the statement the highest level of dissent since 1992. During the press conference Fed Chair Jerome Powell explained the talk focused on the tone of policy rather than any instant need for rate hikes. Even so traders have scaly back expectations of rate cuts in 2026 and are now pricing in more than a 10% chance of a rate boost by the end of the year.
At the same time rise energy prices driven by geopolitical tensions are attaching to inflation concerns. The status in the Middle East remains upset with US President Donald Trump refusing Iran’s latest proposal to end the war. He also repeated that no agreement will be reached unless Iran gives up its nuclear program. In extension the naval blockade of Iranian ports continues to break energy supply routes through the Strait of Hormuz.
These factors are supporting the US Dollar power and limiting any strong upside move in gold. Still gold has handled to break a three-day losing streak and is currently trading near $4,565, up around 0.50% on same day. Market participators are now delaying for key US data including the advance Q1 GDP report and the PCE Price Index. Policy updates from the Bank of England and the European Central Bank may also drive market volatility.
Technical outlook
Gold technical setup rest weak. The price just failed to stay above the 200-period Simple Moving Average on the 4 hour chart and under below the 38.2% Fibonacci retracement level of the March and April rally which favors sellers.
Impetus indicators also point to nonstop pressure. The Relative Strength Index (RSI) is near 38 showing weak buying power while the MACD remains in negative territory. This suggests that any recovery could be limited unless gold moves above key resistance levels.
On the downside instant support is at $4,494. A break under this level could push prices toward $4,401 and then $4,268, where powerful support may come into play if selling pressure increases further.
