Gold (XAU/USD) price edges up at the beginning of the week as the reopening of the Strait of Hormuz faces delays due to demands from Iran to the US, and is capped by the modest strength of the Greenback, with traders eyeing the release of crucial US inflation data. At the time of writing, the XAU/USD pair trades at $4,352, up 0.50%, after bouncing off daily lows of $4,316.
Technical Analysis
Technical Analysis: Gold mantains a constructive bullish bias amid firm bullish momentum
XAU/USD maintains a constructive bullish bias as it holds above the 50-day Simple Moving Average (SMA) near $4,150 while still trading below the 100-day SMA around $4,389. The price action suggests a developing recovery phase, with the Relative Strength Index (RSI) on the daily chart hovering in the mid-60s to hint at firm but not yet overextended upside momentum, while the Average Directional Index (ADX) in the high-20s suggests a moderately strengthening trend.
On the topside, immediate resistance emerges at the 100-day SMA around $4,389, with a subsequent barrier layered higher at the horizontal resistance zone near $4,500. On the downside, initial demand is seen at the 50-day SMA around $4,150, ahead of a more substantial horizontal support shelf near $4,000, where a break would undermine the current bullish tone and expose a deeper corrective phase.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Fundamental Analysis
XAU/USD holds above $4,350 as investors weigh Oil-driven inflation risks, Fed bets and upcoming US data
The US Dollar Index (DXY), which measures the performance of the buck against a basket of peers, is up 0.14% at 99.75 as market participants continue to digest the US and Japanese interventions in the FX markets.
Last week, a softer-than-expected Nonfarm Payrolls report showed that the jobs market remains in a low-hiring, low-firing mode, as said by Richmond Fed President Thomas Barkin. The US economy slashed 23K jobs, missing forecasts for an 80K increase, and the May and June numbers were revised downward. Although the data sparked a trimming of Fed hawkish bets, it's just one reading, and now eyes turn to the release of US inflation figures.
July’s Consumer Price Index (CPI) is expected to ease from 3.5% to 3.4% YoY. Core CPI, which excludes volatile items, is projected to tick lower from 2.6% to 2.5% YoY. A day after this, on Thursday, the Producer Price Index is also projected to ease.
On the same day, Initial Jobless Claims for the week ending August 8 are expected to rise from 199K to 201K. Due to the weaker-than-expected NFP, claims will be closely watched by investors, who are also looking for signs of weakness in the labor market that could prevent the Fed from cutting interest rates, even though inflation remains stubbornly high.
So far, money markets have priced in 22 basis points of tightening by the Federal Reserve towards the end of 2026, up from 17 basis points expected last Friday, according to Prime Terminal data.
Aside from this, geopolitics continued to move the needle, including the exacerbated rally in Oil prices, a headwind for the yellow metal. West Texas Intermediate (WTI), the US crude benchmark, is up nearly 6% to $81.54 per barrel as talks for a reopening of Hormuz continue, but progress has slowed after Iran said the US should agree to Tehran’s demands.
Iran’s demands are that there should be an end to hostilities, a halt to military actions, withdrawal of US forces, compensation for war damages, lifting of sanctions and release of frozen assets. If met, the reopening of the Strait of Hormuz could be faster.
XAU/USD price forecast: Gold faces 100-day SMA as bulls target $4,500
Gold price advance continued, but as of writing, it remains below the 100-day Simple Moving Average (SMA) at $4,389, seen as crucial for buyers if they would like to conquer higher prices.
Momentum is bullish, as indicated by the Relative Strength Index (RSI), which confirms further upside. Hence, the path of least resistance is tilted to the upside. If XAU/USD clears the 100-day SMA, this clears the path to challenge the $4,400 psychological level. Above lies the 200-day SMA at $4,498, followed by the $4,500 milestone.
On the downside, initial support is at the July 6 high, now at $4,202. If this level fails, the next support levels are the 50-day SMA at $4,150 and $4,100.
XAU/USD Forecast Poll
1 Week
- 50%
- Bullish
- 0%
- Bearish
- 50%
- Sideways
1 Month
- 20%
- Bullish
- 60%
- Bearish
- 20%
- Sideways
1 Quarter
- 50%
- Bullish
- 33%
- Bearish
- 17%
- Sideways
Gold (XAU/USD)
In the Forex market, Gold functions as a currency. The particularity of Gold is that it is traded against the United States Dollar (USD), with the internationally accepted code for gold being XAU.
Known as a safe-haven asset, Gold is expected to appreciate in periods of market volatility and economic uncertainty. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn't rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. The United States is the country that holds the biggest resources of Gold in the world.
The XAU/USD pair tells the trader how many US Dollars are needed to purchase one troy ounce of Gold.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold prices escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher borrowing costs usually weigh on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars. A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
Organizations that influence XAU/USD
- WGC (World Gold Council) is the market development organization for the Gold industry. Its aim is to stimulate and sustain demand for the precious metal.
- LBMA (London Bullion Market Association) is an organization whose members participate in this wholesale over-the-counter market for trading Gold and Silver. It is loosely overseen by the Bank of England. Most LBMA members are major international banks, bullion dealers, and refiners.
- COMEX (Commodity Exchange) is the primary market for trading metals. The COMEX merged with the New York Mercantile Exchange (NYMEX) in 1994 and joined the CME Group in 2008.
- CGSE (Chinese Gold and Silver Exchange Society) is an organization of Gold trading firms in Hong Kong that are participants of the Chinese Gold and Silver Exchange, the first exchange in Hong Kong.
- Central banks like the Federal Reserve (Fed), the European Central Bank (ECB) or the People's Bank of China (PBoC) significantly influence Gold prices through their monetary policies.
People that influence XAU/USD
- Neal Froneman, the World Gold Council's Chairman.
- Scott Bessent, the US Treasury Secretary.
- Xi Jinping, President of the People's Republic of China.
- The London Bullion Market Association members.
Circumstances that influence XAU/USD
The main variables traders should monitor to understand Gold's position are:
- Demand and supply: The balance between global Gold demand and its availability impacts its price.
- Economic uncertainty and currency devaluation: Gold is widely known as a safe-haven asset for investors in periods of economic uncertainty or when a currency faces devaluation.
- Practical applications: The use of Gold in technology innovations, jewelry manufacturing and other industrial applications.
Assets that influence XAU/USD
- Currencies: The US Dollar (USD) and the Euro (EUR) are the primary currencies influencing Gold prices. Other important currency pairs include EUR/USD, GBP/USD, USD/JPY, AUD/USD, USD/CHF, NZD/USD, and USD/CAD.
- Commodities: Silver and Gold are the most important precious metal commodities.
- Bonds: Influential fixed-income securities include the German Bund (a federal government-issued bond) and the US Treasury Note (T-Note).
- Indices: Key indices related to Gold and mining include the HUI (NYSE Arca Gold BUGS), the XAU (Philadelphia Gold and Silver Index) and the GDM (NYSE Arca Gold Miners Index).
- Exchanges: The most important stock exchanges for Gold are the New York Mercantile Exchange (COMEX), the Chicago Board of Trade, the Euronext/LIFFE, the London Bullion Market, the Tokyo Commodity Exchange, the Bolsa der Mercadorias e Futuros and the Korea Futures Exchange.