FX.co ★ AKR48 | XAU/USD, GOLD

XAU/USD Bulls appear cautious in the face of conflicting fundamental signs; therefore, there is no follow-through buying in gold. The USD is underpinned by tensions with Iran, while the commodity is supported by resurgent Fed rate cut expectations. Before preparing for any further upside, the technical setup further calls for prudence. Although it lacks negative conviction and is still over $4,600, gold (XAU/USD) is still on the defensive going into Friday's European session. After falling to a one-and-a-half-week low on Thursday due to geopolitical concerns brought on by the stalled US-Iran peace negotiations, the US dollar (USD) has modestly recovered. Additionally, the USD receives some support from the US Federal Reserve's (Fed) hawkish stance, which also helps to cap the unyielding yellow metal, which is still on track to record losses for the second consecutive week. President Donald Trump of the United States rejected an Iranian proposal to lift the embargo and open the Strait of Hormuz while delaying nuclear concerns. Trump said that he will maintain a naval blockade of Iran until the government consents to an agreement that allays US worries about its nuclear programme. Additionally, there are rumours that the US is thinking about launching fresh military attacks against Iran. This increases concerns that hostilities between the US and Iran may worsen, which supports the USD's reserve currency status and hurts the price of gold. Three officials voted against the accommodative tone in the policy statement, resulting in the biggest number of dissents since 1992. Meanwhile, the Fed maintained its key policy rate at 3.50%–3.75% on Wednesday. Furthermore, the US macro data that was made public on Thursday showed that inflation picked up speed in March and that the economy remained resilient, confirming predictions that the US central bank might maintain current rates well into the following year. This is thought to be another element supporting the US dollar and depressing the price of gold.