.jpg)
Gold Prices Trim Gains but Demand Remains Strong Above $4,550 Amid Weakening US Dollar
Gold prices pared part of their intraday gains during Monday’s trading session, although demand for the precious metal remained solid above the US$4,550 level as the US Dollar continued to weaken amid mixed market sentiment.
The XAU/USD pair struggled to extend its modest Asian session rally toward the US$4,580 region and remained capped below the upper boundary of last week’s trading range. Market sentiment was influenced by weekend developments suggesting progress toward a potential peace agreement between the United States and Iran, which pressured the US Dollar and supported gold prices.
However, investors remain cautious as Washington and Tehran continue to disagree on several key issues, limiting broader bullish momentum in the gold market.
From a technical perspective, gold prices continue to trade within a descending parallel channel. The upper boundary of the channel aligns closely with the 200-period Exponential Moving Average (EMA) on the 4-hour chart, creating a strong resistance zone near US$4,650. This indicates that the recent rebound may still be vulnerable despite improving momentum indicators.
The Moving Average Convergence Divergence (MACD) indicator remains above the zero line, while the histogram continues to print positive values. Meanwhile, the Relative Strength Index (RSI) stays in the mid-50 range, signaling a temporary recovery rather than a confirmed bullish trend reversal.
On the downside, the lower boundary of the parallel channel near US$4,360 serves as the next major support level. A breakdown below this floor could reinforce the broader bearish structure and open the door for deeper corrections in the medium-term downtrend.
Fed Hawkish Outlook Limits Gold Rally
Expectations that the US Federal Reserve will maintain a hawkish monetary policy stance helped limit further weakness in the US Dollar and capped additional upside for non-yielding gold assets.
According to Axios, citing a US official on Saturday night, the United States and Iran are reportedly close to signing an agreement involving a 60-day ceasefire extension that would reopen the Strait of Hormuz. In addition, US President Donald Trump stated that most aspects of a peace framework with Iran had already been negotiated.
The development boosted investor confidence, while declining crude oil prices eased inflation concerns and triggered a sharp drop in US Treasury yields amid thin market liquidity due to several global holidays. These factors significantly pressured the Greenback and provided support for gold prices.
Despite this, Trump reportedly instructed negotiators not to rush the agreement process and emphasized that naval restrictions on Iranian ports would remain in place until a formally certified deal is signed.
In addition, ongoing disputes regarding Iran’s nuclear program continue to limit optimism. Market speculation that the Federal Reserve could raise interest rates again in 2026 may also strengthen the US Dollar moving forward.
As a result, traders may prefer to wait for stronger buying momentum before confirming that gold has established a short-term bottom near the US$4,450 region — its lowest level since late March reached last week.