Gold Edges Up as Strong Dollar Limits Further Gains

Key Moments

Gold Holds Mild Gains as Dollar Consolidates Post-Fed Rally

Gold (XAU/USD) is trading with small intraday gains during the Asian session on Thursday, but the lack of strong follow-through buying is keeping investors cautious about the potential for a sustained rebound from the fresh monthly low recorded the previous day. The move comes as the US Dollar enters a period of bullish consolidation after Wednesday’s climb to a two-and-a-half-week high, a rise driven by a relatively hawkish outcome from the latest Federal Reserve meeting. The firmer Greenback remains a significant supporting factor for the metal, yet also acts as a constraint on the scale of any recovery.

Fed Decision and Market Repricing of Rate Expectations

In line with widespread expectations, the Federal Reserve left its key policy rate unchanged at 3.50%-3.75%. The decision was notable for registering the largest number of dissents since 1992, with three policymakers opposing the accommodative tone in the policy statement. During the post-meeting press conference, outgoing Fed Chair Jerome Powell stated that the internal debate focused on “the neutrality of the tone and not the need to hike interest rates.” Even so, market participants sharply scaled back expectations for additional easing in 2026 and are now assigning more than a 10% probability to a rate hike before year-end.

Geopolitical Tensions, Oil Prices, and Dollar Support

The Fed decision arrives against a backdrop of war-related disruptions in energy markets, where a surge in crude oil prices is intensifying inflation concerns. These price moves are occurring alongside stalled US-Iran peace talks, a combination that continues to favor US Dollar bulls.

In the latest development tied to the Middle East situation, US President Donald Trump rejected a new proposal from Iran aimed at ending the two-month conflict and reiterated that there will be no peace agreement with Iran unless it abandons its nuclear program. Trump also noted that the naval blockade of Iranian ports is contributing to ongoing disruptions in energy flows through the Strait of Hormuz.

This geopolitical environment continues to reinforce the Greenback’s role as a reserve currency and is preventing gold from staging a more robust advance. Even so, the XAU/USD pair has broken a three-day losing streak and is currently trading just above the $4,550 mark, up 0.25% on the day.

Data and Central Bank Agenda in Focus

Attention is now turning to upcoming macroeconomic releases and central bank events that could inject additional volatility into gold and currency markets. On the US side, investors are watching the Advance Q1 GDP report and the Personal Consumption Expenditures (PCE) Price Index. In parallel, policy announcements from the Bank of England and the European Central Bank are also in focus and could influence cross-asset positioning.

Technical Picture: Gold Still Looks Vulnerable

From a technical standpoint, gold remains exposed to further downside. The recent inability to sustain a move above the 200-period Simple Moving Average (SMA) on the 4-hour chart, combined with an overnight break below the 38.2% Fibonacci retracement of the March-April advance, continues to favor a bearish bias for XAU/USD.

Momentum indicators are also signaling fragility. The Relative Strength Index (RSI) is hovering close to 38, while the Moving Average Convergence Divergence (MACD) line remains below the zero line. Together, these signals suggest that attempts to recover may struggle as long as the price stays capped beneath these key technical barriers.

Key Technical Levels

On the downside, immediate support is located at the 50.0% Fibonacci retracement area near $4,494.59. Below that, deeper Fibonacci support levels are noted at $4,401.36 and $4,268.64. The latter two zones are seen as broader corrective cushions should renewed selling pressure emerge.