Gold (XAU/USD) fell to 4,174 USD per troy ounce on Wednesday, reaching its lowest level since late March.
Pressure on the precious metal intensified following a new escalation of tensions in the Middle East. The US launched strikes against Iranian targets after reports that an American helicopter had been shot down. This latest development has once again raised doubts about the durability of the current truce and the prospects for a broader peace agreement.
Another key factor remains the situation surrounding the Strait of Hormuz. Ongoing disruptions to shipping through the region continue to constrain energy supplies and support elevated oil prices. These disruptions, in turn, are fuelling concerns that inflationary pressures across the global economy may persist for longer than expected.
Higher energy costs are prompting investors to reassess the monetary policy outlook for major central banks. Markets are increasingly pricing in a prolonged period of elevated interest rates and are no longer ruling out additional policy tightening if inflation remains stubbornly high.
Investor focus is now on upcoming US inflation data, which could provide important clues regarding the Federal Reserve’s next steps. The US dollar is also receiving support from strong labour market figures, which have reinforced expectations that the Fed could consider another interest rate increase before the end of the year.
As a result, the outlook for Gold (XAU/USD) remains broadly bearish.
Technical Analysis
On the H4 chart, XAU/USD is trading within a consolidation range around the 4,393 USD level before breaking lower and extending its decline to 4,175 USD. A corrective rebound towards 4,390 USD is possible in the near term, after which the market may resume its decline towards 4,238 USD, with scope for a further move to 4,088 USD.
The MACD indicator confirms the prevailing bearish momentum. Its signal line remains below the centre line and continues to point firmly downwards, although early signs of a potential reversal are emerging.
On the H1 chart, the market broke below the 4,270 USD level and moved lower towards 4,175 USD. A corrective recovery towards 4,329 USD, as a retest from below, is possible before another decline towards 4,088 USD. After that, a broader rebound towards 4,390 USD may develop.
The Stochastic oscillator supports this scenario. Its signal line remains below the 20 level but is beginning to turn upwards towards 80, indicating that a short-term corrective recovery may be gathering momentum.
Conclusion
Gold remains under significant pressure as geopolitical tensions, elevated energy prices, and expectations of prolonged restrictive monetary policy continue to support the US dollar. While technical indicators suggest a short-term corrective rebound, the broader outlook remains bearish unless market sentiment or inflation expectations change materially.
