XAU/USD: Price Analysis and Forecast — Fundamental Factors Favor the Bears

Gold (XAU/USD) remains under pressure, although it is showing some resilience below the $4700 level. The US dollar has been strengthening for the third consecutive day, acting as a key factor weighing on the asset. Ongoing tensions between the United States and Iran—driven by the US naval blockade of Iranian ports and conflict in the Strait of Hormuz—remain a significant market driver. Additional pressure comes from reduced expectations of further interest rate cuts by the Federal Reserve, which supports the dollar and weighs on precious metal prices.On Tuesday, US President Donald Trump announced a temporary extension of the truce with Iran just hours before it was due to expire. Nevertheless, market participants remain skeptical about the prospects for sustained de-escalation, given the lack of meaningful progress in peace negotiations and the continuing escalation in the Strait of Hormuz.

Trump confirmed that the naval blockade of Iranian ports will continue, while Iran insists on its removal as a precondition for resuming dialogue. In addition, the Islamic Revolutionary Guard Corps (IRGC) reported the seizure of two container ships—the first such incidents since the beginning of the conflict with the United States and Israel in February. This increases the risk of further escalation and maintains a high level of geopolitical uncertainty, supporting the US dollar as a safe-haven asset.At the same time, disruptions in energy supplies through this strategically important maritime route continue to keep oil prices elevated, contributing to accelerating global inflation. In turn, this strengthens expectations of tighter monetary policy from major central banks, including the Federal Reserve. Although policymakers still allow for one rate cut by the end of the year, persistent inflationary pressure and solid economic activity raise the bar for policy easing. As a result, the Fed may adopt a wait-and-see stance, which further supports the US dollar and contributes to capital outflows from precious metals.

Bearish sentiment for XAU/USD is intensifying; however, market participants are advised to wait for a firm break below the $4700 level before opening new short positions. Oscillators on the daily chart are negative. Nevertheless, the 200-day SMA has not yet turned downward, indicating that the bearish sentiment in the gold market may be temporary.