Gold Forecast and News
Gold resumes the decline, challenging $4,600
The bearish tone in Gold remains well in place for yet another day on Friday, with prices of the troy ounce of the yellow metal threatening once again the $4,600 mark. The precious metal’s decline comes on the back of persistent tensions in the Middle East, rising US Treasury yields and a firmer Greenback.
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XAU/USD Technical Overview
The near-term bias is neutral with a mild bearish tilt as price has slipped below the 21-day Simple Moving Average (SMA) near $5,080 and the 50-day SMA around $4,980, breaking the prior short-term upward structure while still holding well above the rising 100- and 200-day SMAs, which anchor a broader uptrend. The 21-day SMA has started to roll over while price accelerates away from it on the downside, indicating fading upside momentum. The Relative Strength Index (RSI) at 35.66 stays below the 50 midline but above oversold territory, reinforcing a corrective, rather than impulsive, downside phase within a longer-term bullish context.
Immediate resistance emerges at the 50-day SMA around $4,980, with the 21-day SMA near $5,080 as the next upside hurdle if buyers attempt a rebound. A daily close back above this zone would improve the short-term outlook and expose the recent highs near $5,330. On the downside, initial support sits at the recent swing low close to $4,650, with a break below this level opening the way toward the rising 100-day SMA now near $4,610. As long as price holds above the 100-day and 200-day SMAs cluster, the broader bullish structure stays intact despite current downside pressure.
Fundamental Overview
Iranian Foreign Minister Abbas Araghchi vowed to show “ZERO restraint” if the country’s energy infrastructure were hit again, per Bloomberg. Meanwhile, Saudi Foreign Minister Faisal bin Farhan Al Saud warned that the kingdom’s restraint isn’t "unlimited" and added it could take military action. Rising geopolitical risks could boost traditional safe-haven assets such as Gold in the near term.
On the other hand, soaring crude oil and energy prices, driven by the escalating US-Israeli war with Iran, reignite inflation fears. This, in turn, might delay rate cuts and make non-yielding gold less attractive.
The US Federal Reserve left interest rates unchanged on Wednesday and expressed concern about the impact of rising oil prices on inflation. Fed Chair Jerome Powell said that the possibility of a rate hike has come up in policy committee discussions. Hawkish remarks from Fed officials lift the US Dollar and weigh on the USD-denominated commodity price.
Traders could sell liquid assets like yellow metal to cover margin calls and raise cash during the broader market volatility. “Global markets have seen broad selloffs as investors search for the quickest assets to sell, perhaps we are now seeing the next leg of this phase where the perceived safe haven assets are sold to fund purchases of those that may have overacted to the current situation,” said Paul Surguy, managing director and head of investment management and proposition at Kingswood Group.
SPECIAL WEEKLY FORECAST
Interested in weekly XAU/USD forecasts? Our experts make weekly updates forecasting the next possible moves of the gold-dollar pair. Here you can find the most recent forecast by our market experts:
Gold: Major central banks’ hawkish tone weighs heavily Premium
Gold (XAU/USD) extended its slide into a third consecutive week and lost more than 6%, its worst weekly performance since March 2020, as major central banks adopted a hawkish tone because of the upside risks to inflation posed by rising energy prices.
Latest XAU/USD Analysis
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EUR/USD bounces off lows, back to 1.1560
EUR/USD manages to pick up some pace and rebounds from earlier lows, revisiting the 1.1560 region on Friday, giving back part of Thursday’s ECB-driven rally. Meanwhile, the US Dollar trades with marked gains, supported by a cautious tone across global markets and persistent geopolitical tensions.
GBP/USD meets support around 1.3300
GBP/USD retreats on Friday, surrendering part of Thursday’s strong advance and dropping to as low as the 1.3300 region. The US Dollar draws support from the softer risk tone, making it harder for Cable to hold its ground as investors digest the latest developments around the Middle East crisis.
USD/JPY bounces alongside USD, retakes 158.00
USD/JPY is rebounding alongside the US Dollar in Friday's Asian trading, retaking 158.00 after having dropped 1.25% on Thursday, in a session dominated by broad Yen strength. The pair had rallied to within a few pips of the 160.00 level earlier in the week before reversing sharply, and Thursday's large bearish candle erased most of the gains accumulated over the prior five sessions.
Gold resumes the decline, challenging $4,600
The bearish tone in Gold remains well in place for yet another day on Friday, with prices of the troy ounce of the yellow metal threatening once again the $4,600 mark. The precious metal’s decline comes on the back of persistent tensions in the Middle East, rising US Treasury yields and a firmer Greenback.
WTI price corrects after failing to return above $100
West Texas Intermediate (WTI) trade over 1% lower to near $93.10 during the early European trading session. The oil price faces selling pressures as multiple events relating to Middle East conflicts, such as Israel’s pledge to refrain attacking Iranian oil infrastructure and potential talks on removal of sanctions on Iran’s oil stuck in the sea, have eased oil supply concerns.
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Gold (XAU/USD)
In the Forex market, Gold functions as a currency. The particularity of Gold is that it is traded against the United States Dollar (USD), with the internationally accepted code for gold being XAU.
Known as a safe-haven asset, Gold is expected to appreciate in periods of market volatility and economic uncertainty. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. The United States is the country that holds the biggest resources of Gold in the world.
The XAU/USD pair tells the trader how many US Dollars are needed to purchase one troy ounce of Gold.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold prices escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher borrowing costs usually weigh on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars. A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
ORGANIZATIONS THAT INFLUENCE XAU/USD
- WGC (World Gold Council) is the market development organization for the Gold industry. Its aim is to stimulate and sustain demand for the precious metal.
- LBMA (London Bullion Market Association) is an organization whose members participate in this wholesale over-the-counter market for trading Gold and Silver. It is loosely overseen by the Bank of England. Most LBMA members are major international banks, bullion dealers, and refiners.
- COMEX (Commodity Exchange) is the primary market for trading metals. The COMEX merged with the New York Mercantile Exchange (NYMEX) in 1994 and joined the CME Group in 2008.
- CGSE (Chinese Gold and Silver Exchange Society) is an organization of Gold trading firms in Hong Kong that are participants of the Chinese Gold and Silver Exchange, the first exchange in Hong Kong.
- Central banks like the Federal Reserve (Fed), the European Central Bank (ECB) or the People's Bank of China (PBoC) significantly influence Gold prices through their monetary policies.
PEOPLE THAT INFLUENCE XAU/USD
- Neal Froneman, the World Gold Council’s Chairman.
- Scott Bessent, the US Treasury Secretary.
- Xi Jinping, President of the People's Republic of China.
- The London Bullion Market Association members.
CIRCUMSTANCES THAT INFLUENCE XAU/USD
The main variables traders should monitor to understand Gold’s position are:
- Demand and supply: The balance between global Gold demand and its availability impacts its price.
- Economic uncertainty and currency devaluation: Gold is widely known as a safe-haven asset for investors in periods of economic uncertainty or when a currency faces devaluation.
- Practical applications: The use of Gold in technology innovations, jewelry manufacturing and other industrial applications.
ASSETS THAT INFLUENCE XAU/USD
- Currencies: The US Dollar (USD) and the Euro (EUR) are the primary currencies influencing Gold prices. Other important currency pairs include EUR/USD, GBP/USD, USD/JPY, AUD/USD, USD/CHF, NZD/USD, and USD/CAD.
- Commodities: Silver and Gold are the most important precious metal commodities.
- Bonds: Influential fixed-income securities include the German Bund (a federal government-issued bond) and the US Treasury Note (T-Note).
- Indices: Key indices related to Gold and mining include the HUI (NYSE Arca Gold BUGS), the XAU (Philadelphia Gold and Silver Index) and the GDM (NYSE Arca Gold Miners Index).
- Exchanges: The most important stock exchanges for Gold are the New York Mercantile Exchange (COMEX), the Chicago Board of Trade, the Euronext/LIFFE, the London Bullion Market, the Tokyo Commodity Exchange, the Bolsa der Mercadorias e Futuros and the Korea Futures Exchange.