FX.co ★ PipsHunter99 | XAU/USD, GOLD

Technical and Fundamental Analysis of the Gold (XAU/USD) Gold prices continued to firm during Thursday’s early trading session after climbing to a fresh one-week high above the $4,700 region earlier in the week. The precious metal remains supported by improving investor confidence surrounding possible diplomatic progress between the United States and Iran. Market sentiment shifted positively after reports indicated that both sides are moving closer to a broad agreement that could reduce geopolitical tensions and stabilize conditions across the Middle East. Recent reports suggest that negotiations between Washington and Tehran are centered around a proposed 14-point framework designed to ease the ongoing conflict. The reported plan includes limits on Iran’s uranium enrichment activities, partial removal of economic sanctions, and the restoration of unrestricted commercial navigation through the Strait of Hormuz. Iranian authorities stated on Wednesday that they are currently reviewing the latest U.S. proposal, increasing expectations that formal negotiations could advance further in the near term. The prospect of a diplomatic settlement has improved overall market risk appetite and reduced fears of long-term disruption to global energy supplies. If shipping operations through the Strait of Hormuz return to normal, pressure on oil markets could ease significantly after weeks of elevated volatility. Lower crude prices would likely help cool inflation concerns globally, particularly after energy costs surged sharply during the recent escalation in tensions. The softer inflation outlook has weighed on the U.S. dollar. Investors increasingly believe that easing price pressures may reduce the need for the Federal Reserve to maintain an aggressively restrictive monetary policy stance. The resulting weakness in the dollar has created a supportive environment for gold prices, as a cheaper greenback typically boosts demand for dollar-denominated assets such as bullion while reducing the opportunity cost of holding non-yielding metals. Even with sentiment improving, traders remain cautious ahead of the highly anticipated U.S. Nonfarm Payrolls (NFP) report scheduled for Friday. The employment figures are expected to provide critical insight into the strength of the U.S. economy and could heavily influence expectations for future Federal Reserve policy decisions. Economists currently forecast payroll growth of approximately 60,000 jobs in April, sharply below the strong 178,000 increase recorded in March. Meanwhile, the unemployment rate is projected to remain unchanged at 4.3%. Financial markets are paying close attention to labor market conditions to determine whether the U.S. economy can continue absorbing elevated interest rates and geopolitical uncertainty. A weaker employment report may strengthen expectations for eventual Fed rate cuts later this year, while stronger-than-expected data could reinforce the central bank’s cautious approach toward monetary easing. Earlier in the week, the ADP employment report provided mixed but generally supportive signals for the labor market. U.S. private-sector hiring increased by 109,000 jobs in April, exceeding analyst expectations and improving noticeably from March’s revised figure of 61,000. The stronger ADP reading added further anticipation ahead of the official government payroll release. Gold XAU/USD is trading near $4,700 on the daily timeframe, maintaining a positive short-term outlook after successfully breaking above descending trendline resistance around $4,595. This breakout confirmed a bullish falling wedge pattern, reinforcing the recent recovery phase. In addition, gold remains slightly above the 20-day Simple Moving Average (SMA) near $4,701, which is currently acting as immediate dynamic support. Nevertheless, the broader upward move still faces significant resistance levels overhead. The 100-day SMA around $4,774 and the 50-day SMA near $4,790 continue to restrict stronger bullish continuation. A confirmed breakout above these technical barriers could accelerate upside momentum and expose higher resistance levels in the sessions ahead. On the downside, first support remains near the 20-day SMA at approximately $4,605, followed by ascending trendline support extending from the $4,367 area. Further below, the 200-day SMA near $4,307 represents a major long-term support zone that could become increasingly important if selling pressure returns to the market.