Gold surges to its highest level in more than a week as Trump’s signs of easing tensions trigger USD sell-off

Gold Price Climbs for Third Consecutive Session

Gold (XAU/USD) extended its rally for a third day on Tuesday during Asian trading, reaching its highest level in a week and a half. However, the precious metal faced resistance near the $4,600 threshold. The upward move was supported by reports that US President Donald Trump is considering scaling back military operations against Iran, even if the Strait of Hormuz remains largely blocked. This news sparked a correction in crude oil prices, which helped ease inflation worries and pushed US Treasury yields lower. As a result, some investors took profits on the US Dollar (USD), providing additional support for gold.

At the same time, Iran has shown little interest in direct talks with the US, highlighting the fragile state of diplomatic efforts. The US continues to send more troops and resources to the region, fueling uncertainty and reducing hopes for a swift resolution to Middle East tensions. These developments are likely to support crude oil prices and keep inflation risks elevated, reinforcing expectations for higher interest rates worldwide. Anticipation of tighter monetary policy from central banks, including the US Federal Reserve (Fed), is expected to limit further gains in non-yielding assets like gold.

Market participants now appear to have dismissed the likelihood of additional rate cuts by the US central bank, with growing speculation about a potential rate hike before year-end. This outlook has encouraged investors to buy dips in the USD, which may act as a ceiling for gold prices. Therefore, traders may want to wait for a decisive move higher before betting on a continued recovery from the 200-day Simple Moving Average (SMA) near $4,100—a level not seen in four months and tested last week.

Attention now turns to the US economic calendar, which features the release of JOLTS Job Openings and the Conference Board's Consumer Confidence Index. Additionally, speeches from key FOMC officials are expected to influence the USD and, by extension, gold prices. Nevertheless, geopolitical events remain the primary driver of volatility for the XAU/USD pair.

XAU/USD Daily Chart Overview

Gold Faces Key Resistance at 100-Day SMA

From a technical standpoint, gold's short-term outlook remains cautiously bearish as it trades just below the 38.2% Fibonacci retracement of its recent decline from the monthly high. The metal is also positioned under the 100-day Simple Moving Average (SMA), indicating that while the broader uptrend persists, it is currently under pressure. The 200-day SMA continues to trend higher, supporting the longer-term bullish case despite the recent pullback.

The Relative Strength Index (RSI) has rebounded from oversold levels to around 41, suggesting that while downside momentum has eased, upward strength remains limited. Meanwhile, the Moving Average Convergence Divergence (MACD) indicator stays in negative territory, signaling that bullish momentum is fading.

• Initial resistance is found at the 38.2% Fibonacci retracement level of $4,592.49.
• The next barrier is the 100-day SMA near $4,637; a daily close above this could pave the way for a move toward the 50.0% retracement at $4,747.16.

On the downside, immediate support lies near recent lows around $4,470, followed by the 23.6% retracement at $4,401.11, an area of previous price congestion. A drop below $4,401.11 would expose the $4,200–$4,150 zone and shift focus to the rising 200-day SMA at $4,129 as a key support level.

As long as gold remains above the 23.6% retracement and the 200-day SMA, the broader bullish structure is intact. However, a break below these levels would reinforce the current bearish short-term outlook.

(This technical analysis was generated with the assistance of an AI tool.)

Technical Snapshot

On the daily chart, XAU/USD is currently trading at $4,584.62.