Key Moments
- Gold (XAU/USD) trades around $4,835, close to a nearly four-week high after recovering from the prior session’s pullback.
- Expectations for progress in US-Iran diplomacy and waning odds of a Federal Reserve rate hike weigh on the US Dollar and underpin bullion.
- Ongoing geopolitical tension in the Gulf and Israel-Lebanon theater keeps safe-haven demand for the USD in play and curbs further gold upside.
Gold Supported by Weaker Dollar and Risk-On Sentiment
Gold (XAU/USD) maintains a constructive tone during the Asian session on Thursday, trading near the $4,835 level and staying close to the near four-week peak reached in the previous session. Market participants continue to rotate into risk-sensitive assets amid confidence that diplomatic channels with Iran remain open, which is seen as eroding some support for the US Dollar and favoring the precious metal.
US President Donald Trump said that he believes the war with Iran may be coming to a conclusion soon, while the White House expressed optimism about reaching a deal to end the conflict. Moreover, reports suggest that there are growing prospects for a second round of peace talks between the US and Iran that could take place in a matter of days. The optimism, in turn, remains supportive of the upbeat market mood and dents the safe-haven premium. Adding to this, diminishing odds for a rate hike by the US Federal Reserve (Fed) contribute to the bearish sentiment surrounding the USD and further lend support to the non-yielding Gold.
Fed Expectations, Oil Prices, and Inflation Data Pressure the Greenback
Expectations for diplomatic efforts to end the conflict keep Crude Oil prices well within striking distance of a three-week low set on Tuesday. Moreover, the US Producer Price Index (PPI) released earlier this week eased concerns about the inflationary impact of the war-driven surge in energy prices and tempered hawkish Fed expectations. According to the CME Group’s FedWatch Tool, late 2026 remains the primary window for potential easing by the US central bank. This, in turn, drags the USD Index (DXY), which tracks the Greenback against a basket of currencies, to its lowest level since late February and backs the case for additional gains for the Gold.
Geopolitical Risks Provide a Floor for the Dollar and Cap Gold Upside
Meanwhile, the US naval blockade of Iranian ports, imposed after the end of the Islamabad talks last Saturday, has been fully implemented. Moreover, the leader of Iran’s joint military command said that its military could halt trade in the Gulf region if the US does not lift its blockade. Iran has also demanded an end to Israeli attacks on Lebanon as a precondition for further talks with the US. However, Israel’s Prime Minister, Benjamin Netanyahu, indicated that he had not committed to a ceasefire and said that he instructed the IDF to continue thickening the security zone. This keeps geopolitical risks in play, which should limit USD losses and cap gains for the Gold.
Technical Picture: XAU/USD Tests 200-SMA Barrier
On the 4-hour chart, XAU/USD is trading just beneath the 200-period Simple Moving Average (SMA) at $4,831.22, which serves as near-term resistance and restrains the current advance. The Moving Average Convergence Divergence (MACD) indicator has turned positive, while the Relative Strength Index (RSI) is hovering close to 60. Taken together, these signals point to solid, though not extreme, bullish momentum that has yet to overcome the prevailing technical ceiling.
Analysts consider it more prudent to await a firm move and sustained acceptance above the 200-SMA before targeting additional upside toward $4,916.20, corresponding to the 61.8% Fibonacci retracement of the March decline. A decisive break beyond that zone would be required to ease the existing cap and pave the way toward $5,136.01, followed by the cycle high area near $5,416.01.
On the downside, initial support is located at the 50% Fibonacci retracement level at $4,761.81. Below that, further demand is anticipated around the 38.2% retracement near $4,607.41 and the 23.6% level around $4,416.39. These levels are expected to come into focus if sellers manage to push prices below the current consolidation range.
US Dollar Performance Against Major Currencies This Month
The following table details the month-to-date percentage changes of the US Dollar (USD) versus major currencies. Readings in the USD row show how the Dollar has moved against each counterpart, while values in other rows indicate the performance of those currencies when taken as the base against the listed quotes.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | — | -2.15% | -2.55% | -0.06% | -1.40% | -3.98% | -2.81% | -2.31% |
| EUR | 2.15% | — | -0.41% | 2.19% | 0.77% | -1.89% | -0.70% | -0.16% |
| GBP | 2.55% | 0.41% | — | 2.59% | 1.18% | -1.47% | -0.26% | 0.23% |
| JPY | 0.06% | -2.19% | -2.59% | — | -1.34% | -3.99% | -2.83% | -2.28% |
| CAD | 1.40% | -0.77% | -1.18% | 1.34% | — | -2.69% | -1.51% | -0.93% |
| AUD | 3.98% | 1.89% | 1.47% | 3.99% | 2.69% | — | 1.21% | 1.74% |
| NZD | 2.81% | 0.70% | 0.26% | 2.83% | 1.51% | -1.21% | — | 0.52% |
| CHF | 2.31% | 0.16% | -0.23% | 2.28% | 0.93% | -1.74% | -0.52% | — |
The heat map is read using the currency in the left-hand column as the base and the currency in the top row as the quote. For example, selecting USD in the left column and JPY in the top row shows the percentage move in USD (base) / JPY (quote) for the month so far.
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