FX.co ★ XAU/USD Price Analysis and Forecast: Bears Maintain Control of the Gold Market

Gold (XAU/USD) is trading around the psychological level of $4700, attempting to hold onto a bullish tone. The escalation of the standoff between the United States and Iran around the Strait of Hormuz, along with the lack of progress in the peace process, continues to sustain market tension. Additionally, increased inflation risks are limiting expectations for monetary policy easing by the U.S. Federal Reserve, strengthening the dollar and putting pressure on the precious metal.

Signs of escalation between the U.S. and Iran persist amid a naval blockade of Iranian ports by the U.S. Navy. Iran's Foreign Minister Abbas Araghchi described these actions as an act of war. Meanwhile, key negotiator Mohammad Bagher Ghalibaf emphasized that a full ceasefire would only make sense if there were no restrictions related to the naval blockade. At the same time, U.S. President Donald Trump ordered the country's naval forces to destroy any vessels laying mines in the strategically important maritime corridor. This reduces the likelihood of sustained de-escalation and supports demand for the dollar as a reserve currency, increasing pressure on gold. Meanwhile, ongoing disruptions in energy supplies through a key transportation route are keeping oil prices elevated. This further fuels concerns about accelerating global inflation and could lead to tighter policies by major central banks, including the Federal Reserve. Current market expectations suggest only one 25-basis-point rate cut by the Fed in 2026. Such a scenario supports U.S. Treasury yields and the dollar, negatively impacting non-yielding assets like gold and increasing the likelihood of further weakness.In the U.S. macroeconomic calendar for Friday, the revised University of Michigan Consumer Sentiment Index is scheduled for release. However, geopolitical factors remain the key driver, capable of increasing volatility in global markets and shaping trading opportunities in gold. Nevertheless, the current fundamental backdrop indicates that a bearish scenario prevails for the XAU/USD pair. Therefore, any corrective upward moves may be viewed as selling opportunities and are likely to be short-lived.

From a technical perspective, if prices manage to break above the 20-day and 100-day SMAs again, bulls may regain control. However, as oscillators have moved into negative territory, this confirms the strength of the bears. If gold fails to hold the $4645 level, the decline could accelerate toward the psychological level of $4500.