Gold Surges Above $4,600 as Weaker USD Boosts Middle East Peace Hopes
Gold prices rallied above $4,600 on Wednesday morning, extending a recovery from a more than one-month low near $4,500 touched earlier this week. The US Dollar (USD) came under selling pressure amid renewed optimism over a potential US-Iran peace agreement. In addition, falling Crude Oil prices eased inflation concerns and tempered expectations of a more hawkish Federal Reserve (Fed), further supporting the non-yielding precious metal.
From a technical perspective, the four-hour chart shows that XAU/USD maintains a short-term bearish bias as price remains below tightly clustered moving averages. The 20-period Simple Moving Average (SMA) at $4,579.51 acts as the first resistance, while the 200-period SMA at $4,652.00 and the 100-period SMA at $4,699.21 reinforce a broader corrective tone. Momentum indicators are weakening, with the Relative Strength Index (RSI) hovering around 44 and the Momentum indicator gaining downside traction in negative territory, suggesting that bullish attempts may face selling pressure around these moving averages.
On the upside, immediate resistance aligns with the 20-period SMA near $4,579.51. A sustained breakout above this level is needed to ease short-term pressure and open the door toward the 200-period SMA at $4,652.00, followed by the 100-period SMA at $4,699.21. On the downside, key support stands at $4,500, where buyers have previously emerged. A break below this level could trigger a sharper near-term decline.
Daily chart indicators also point to a bearish outlook for XAU/USD. While spot prices remain above the 200-day SMA at $4,293.20, they are still capped by declining short- and medium-term moving averages. The 20-day SMA at $4,702.36 and the 100-day SMA at $4,766.62 continue to limit upside potential. Meanwhile, RSI and Momentum indicators are rising below their midlines, reflecting a corrective rebound rather than signaling a stronger recovery.
Gold Holds Near $4,550 Amid Geopolitical Tensions and US Data Focus
Spot gold posted moderate intraday gains on Tuesday, trading around $4,550 per troy ounce. The precious metal started the week on a weaker note as tensions in the Middle East intensified. XAU/USD dropped toward $4,500 as peace hopes faded, while concerns over ceasefire violations grew following reports that Iran targeted oil facilities in the United Arab Emirates (UAE).
The United States claimed control over the Strait of Hormuz and announced plans to escort neutral vessels through the conflict zone. However, the effort has yet to show significant success, as the route remains highly restricted on both sides. Meanwhile, US President Donald Trump suggested the war could last “two or three” weeks, repeating similar statements made previously.
Ongoing uncertainty surrounding the conflict initially supported the US Dollar earlier in the week. However, the USD’s corrective decline began in Asia and accelerated during US trading hours following economic data releases. The ISM Services Purchasing Managers’ Index (PMI) indicated a slowdown in April, coming in at 53.6, down from 54 in March.
The Greenback also retreated amid strong equity performance, supported by earnings reports and stable Crude Oil prices. Nevertheless, lingering concerns are likely to keep the USD relatively supported.
From a fundamental standpoint, market focus will remain on the Iran conflict, while US labor market data will also attract investor attention. The ADP Employment Change report is due on Wednesday, followed by the April Nonfarm Payrolls (NFP) report on Friday.