Gold Recovers Some Losses: What’s Driving the Market?

Gold rose to 4,600 USD per ounce on Tuesday, continuing its recovery from the previous session, and is now trading around 4,548 USD. Market sentiment was supported by hopes of a possible resumption of negotiations between the US and Iran, which has somewhat eased concerns over inflation and the energy crisis.

US President Donald Trump announced that he had postponed a planned strike on Iran following appeals from Saudi Arabia, Qatar, and the UAE. According to him, the Gulf states believe an agreement with Tehran is still possible.

Earlier, gold had been under pressure due to escalating tensions in the Middle East. Rising oil prices increased inflationary risks and reinforced expectations of further interest rate hikes by central banks globally.

Additionally, accelerating US inflation continues to weigh on the market. Investors are revising their expectations for Federal Reserve policy, with the likelihood of a rate cut this year declining significantly. Discussions are increasingly focusing on the potential for another rate increase before year-end.

Market attention now turns to the upcoming release of FOMC minutes and preliminary US PMI data. These reports could provide fresh signals regarding the state of the economy and the Fed’s next steps.

Technical Analysis

On the H4 XAU/USD chart, gold has rebounded towards 4,590 USD and is now moving lower towards 4,400 USD. A corrective bounce to 4,550 USD is possible, followed by a further decline towards 4,250 USD. The MACD indicator confirms the current downside momentum, with the signal line below the centre line and pointing firmly downwards.

On the H1 chart, gold has broken below 4,555 USD and continues to move lower towards 4,400 USD. A corrective rebound to 4,550 USD (testing from below) may follow, before a further decline towards 4,250 USD. The Stochastic oscillator supports this scenario, with the signal line below 20 and pointing firmly downwards, indicating continued downside pressure.

Conclusion

Gold is recovering from recent losses, supported by easing geopolitical tensions and hopes for renewed US–Iran talks. However, strong US inflation and expectations of further Fed rate hikes continue to exert downward pressure. Technical indicators suggest a mixed short-term outlook, with potential corrective rebounds followed by further declines.

By RoboForex Analytical Department

Disclaimer:

Any forecasts contained herein are based on the author's particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.