FX.co ★ Wiking | XAU/USD, GOLD

Gold prices started the week on a firmer footing, climbing toward a weekly high after news that the United States and Iran had reached an agreement aimed at ending months of geopolitical tensions. The announcement initially boosted market sentiment as investors welcomed the reopening of the Strait of Hormuz and the prospect of improved energy flows. While such developments typically reduce safe-haven demand, the market reaction has been more nuanced. Traders remain cautious because the agreement still depends on several conditions being met, leaving room for uncertainty. As a result, Gold has managed to attract some buying interest after a sharp decline, though the broader technical picture continues to favor sellers rather than signaling a full trend reversal. Sellers Still Control the Bigger Picture A deeper look at the daily chart shows that Gold remains trapped within a corrective downtrend. The market has been printing a sequence of lower highs and lower lows since peaking near the 5,550 region earlier this year. Recent selling pressure pushed prices below several important moving averages and forced a break beneath multiple support zones. Although the latest rebound has lifted Gold back toward the 4,327 area, buyers are still operating from a position of weakness. Price remains well below the 100-day and 200-day moving averages, confirming that the longer-term structure remains tilted to the downside. The inability of bulls to reclaim those trend-defining levels suggests that institutions continue to use rallies as opportunities to reduce exposure rather than initiate aggressive long positions. Bollinger Bands and Momentum Indicators Reveal a Market in Recovery Mode The Bollinger Bands provide valuable insight into current market conditions. Gold recently pierced the lower Bollinger Band near the 4,100 area, highlighting an oversold extension following aggressive liquidation. Since then, the metal has staged a rebound toward the middle Bollinger Band, which currently sits near 4,415 and acts as the first major resistance barrier. Until price can close decisively above this level, the recovery should be viewed as a corrective bounce within a broader bearish framework. Momentum indicators paint a similar picture. The RSI has recovered toward the mid-40s after approaching oversold territory, indicating that downside pressure has eased but bullish momentum remains limited. Meanwhile, MACD continues to trade below the zero line, although the histogram is showing signs of stabilization. This suggests bearish momentum is slowing rather than reversing outright. Key Support and Resistance Zones Define the Next Move The technical battlefield is becoming increasingly clear. Immediate resistance is located around 4,415, where the Bollinger middle band converges with previous support-turned-resistance levels. Above that, sellers are likely to defend the 4,685 region near the upper Bollinger Band. A stronger bullish recovery would then face a major obstacle around the 100-day moving average near 4,760. On the downside, support remains clustered around 4,140–4,170, an area that recently attracted bargain hunters following the steep selloff. A break below this zone would expose the psychological 4,000 level and potentially accelerate bearish momentum toward fresh multi-month lows. Fundamentals Create Mixed Signals for Precious Metals The fundamental backdrop remains complex. On one hand, the US-Iran peace agreement has eased fears of immediate supply disruptions and reduced concerns about a prolonged energy shock. Lower oil prices help contain inflation expectations and reduce demand for traditional safe-haven assets such as Gold. On the other hand, uncertainty surrounding the final implementation of the agreement continues to support some defensive positioning. Iranian officials have emphasized that several key commitments must still be fulfilled before the deal becomes fully operational. Any deterioration in negotiations could quickly restore geopolitical risk premiums across financial markets and renew demand for Gold as a protective asset. Bullish and Bearish Scenarios Heading Forward For bulls, the path forward requires a sustained move above 4,415 followed by a break through 4,685. Such a development would signal improving momentum and increase the probability of a larger recovery toward the 4,760 region. However, sellers currently maintain the technical advantage. As long as Gold remains below the major moving averages and under the Bollinger midpoint, rallies are likely to encounter fresh selling pressure. A failure to hold above 4,140 would reinforce the bearish trend and open the door to another wave of downside extension. For now, the market appears to be recovering from oversold conditions rather than beginning a new uptrend. The balance of evidence still favors caution, with traders watching whether this rebound can evolve into something more meaningful or simply become another temporary pause within a broader corrective decline.