Gold Prices Near Daily Lows as Strong USD Holds Firm Amid Hormuz Risks
Gold prices remained under pressure for a third consecutive session, staying below the key $4,800 level as a stronger US Dollar limited upside momentum. Despite ongoing diplomatic efforts to ease tensions in the Middle East, lingering friction between the United States and Iran—driven by continued US naval blockades of Iranian ports—continues to support the greenback’s safe-haven status and weigh on the precious metal.
From a technical perspective, gold’s failure to break above the 200-period Simple Moving Average (SMA) on the 4-hour chart signals caution for bullish traders. However, downside movement has so far found support near the 50% Fibonacci retracement of the March decline. This suggests that traders may wait for a decisive break below the $4,765 support zone before confirming further bearish momentum.
Momentum indicators remain mixed. The Relative Strength Index (RSI) is hovering near the neutral 50 level, while the Moving Average Convergence Divergence (MACD) continues to trend lower in negative territory. This combination indicates that sellers still hold a tactical advantage unless gold reclaims the key resistance at the 200-period SMA around $4,814. A sustained breakout above this level could open the door toward the stronger Fibonacci resistance at $4,912 (61.8% retracement), followed by potential targets at $5,130 and $5,409.
On the downside, immediate support lies at $4,759, aligned with the 50% retracement level. A break below this point could expose further declines toward $4,606 and $4,416, where buyers may step in to defend the broader uptrend structure.
Meanwhile, a 10-day ceasefire between Israel and Lebanon has raised hopes for a potential long-term peace agreement between the US and Iran. Former US President Donald Trump expressed optimism, stating that Iran is close to reaching a deal. According to the Wall Street Journal, Washington and Tehran have agreed in principle to resume negotiations, although no specific timeline or venue has been confirmed.
These developments have contributed to a more positive risk sentiment, while declining expectations of further interest rate hikes by the Federal Reserve have capped the US Dollar’s recovery from multi-week lows. This, in turn, has helped gold rebound from intraday lows around $4,768–$4,767.
Earlier in the week, US Producer Price Index (PPI) data eased inflation concerns linked to rising energy prices amid geopolitical tensions. Additionally, expectations of further de-escalation in the Middle East have kept crude oil prices subdued, reducing hawkish pressure on the Fed. Market participants are currently pricing in around a 30% chance of a rate cut by year-end, limiting further USD gains and providing some support for non-yielding assets like gold.
Looking ahead, the absence of major US economic data on Friday leaves the US Dollar sensitive to speeches from key Federal Open Market Committee (FOMC) members. However, investor focus will remain on the upcoming US-Iran peace talks, potentially scheduled for the weekend. Any new developments could drive volatility in financial markets and create trading opportunities in gold. Despite recent weakness, XAU/USD remains on track to post a modest gain for the third consecutive week.