Gold Reclaims $4,500 as Israel–Hezbollah Ceasefire Weighs on US Dollar
Gold prices edged higher during the Asian trading session, although bullish momentum remained limited, with XAU/USD trading slightly above the key psychological level of $4,500. A partial ceasefire agreement between Hezbollah and Israel eased fears of a broader regional conflict, limiting further gains in the safe-haven US Dollar and offering support to bullion prices. However, uncertainty surrounding US-Iran peace negotiations, combined with persistent inflation concerns and expectations of higher interest rates, continued to weigh on demand for the precious metal.
Gold Technical Analysis: Bearish Bias Remains Intact
From a technical perspective, gold continues to trade within a descending parallel channel and remains below the 200-period Simple Moving Average (SMA) on the 4-hour chart, keeping the bearish outlook intact. This structure suggests sellers are still in control despite moderate stabilization in momentum indicators.
The Relative Strength Index (RSI) is hovering near the neutral 49 level, signaling balanced market conditions. Meanwhile, the Moving Average Convergence Divergence (MACD) has slipped slightly into negative territory, indicating weakening bullish momentum.
On the upside, immediate resistance is seen around $4,615.35, followed by the 200-period SMA near $4,619.67 and the upper boundary of the descending channel at approximately $4,655.17. A sustained breakout above these levels would be required to ease current downside pressure.
On the downside, key support is located near the lower boundary of the bearish channel around $4,320.15. A decisive break below this level could reinforce the broader bearish trend and expose gold prices to deeper losses.
Israel–Hezbollah Ceasefire Limits USD Strength
US President Donald Trump announced on social media Monday that Israel had agreed to withdraw forces preparing to attack Beirut and Hezbollah-controlled suburbs. Trump also reportedly communicated with the Iran-backed Lebanese militant group through intermediaries and secured assurances that Hezbollah would refrain from launching attacks against Israel.
The limited de-escalation in geopolitical tensions failed to provide additional support for the US Dollar after its previous rally. However, mixed signals surrounding ongoing US-Iran negotiations to end the three-month-long conflict continued to influence market sentiment and the direction of the greenback.
Iran warned that it could suspend negotiations with the United States following renewed Israeli military operations in Lebanon. Nevertheless, Trump insisted that peace talks with Iran were still ongoing, adding that a deal to extend the ceasefire and reopen the Strait of Hormuz could be reached within the coming week.
Despite these developments, investors remain cautious and are waiting for clearer progress in US-Iran negotiations before taking stronger market positions.
Focus Turns to US Economic Data and Nonfarm Payrolls
Market participants are now closely watching upcoming US economic data, including the JOLTS Job Openings report, for fresh trading direction during the North American session. However, investor focus will remain firmly on Friday’s highly anticipated US Nonfarm Payrolls (NFP) report, which could significantly influence US Dollar demand and gold price volatility.
At the same time, further developments in the Middle East crisis are expected to increase volatility across global financial markets and create new trading opportunities for gold prices. Overall, the current fundamental backdrop still appears to favor bearish sentiment for XAU/USD.