FX.co ★ PipsHunter99 | XAU/USD, GOLD

Technical and Fundamental Analysis of the Gold (XAU/USD) Gold prices (XAU/USD) came under renewed selling pressure below the $4,600 mark during early European trading on Friday. The precious metal pulled back from its three-month peak as fresh U.S. inflation figures strengthened expectations that the Federal Reserve could maintain a restrictive monetary policy or potentially deliver another rate hike. With the latest data already influencing market expectations, traders are now turning their attention to Fed Chairman Kevin Walsh’s speech at the Jackson Hole economic symposium on Friday, hoping for clearer signals on the future path of U.S. interest rates and the potential direction of gold prices. The Bureau of Economic Analysis (BEA) reported on Wednesday that the core Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve’s preferred gauge of underlying inflation, held steady at 3.3% year-on-year in July. The reading matched economists’ expectations and suggested that inflation remains relatively sticky despite the broader disinflation trend. Every month, both the headline PCE Price Index and the core PCE measure increased by 0.2% in July. The figures indicate that inflation is gradually easing but remains sufficiently firm to keep the Federal Reserve cautious about cutting interest rates too quickly. Following the release of the U.S. inflation report, financial markets increased their expectations for a potential Federal Reserve rate hike in September. Data from the CME FedWatch Tool showed that the probability of a September rate increase climbed to around 40%, up from 36% before the inflation figures were published. This shift in rate expectations has created additional pressure on gold. Although gold is widely regarded as an inflation hedge and a safe-haven asset, it does not provide interest income. As a result, higher interest rates can increase the opportunity cost of holding bullion and make yield-bearing assets such as government bonds relatively more attractive to investors. Meanwhile, developments surrounding the Strait of Hormuz could provide some support for gold and help limit the downside risk in XAU/USD. Ongoing diplomatic efforts involving Iran and Oman have raised hopes that the strategically important waterway could reopen, potentially reducing concerns over disruptions to global oil supplies and easing fears of energy-related inflation. Lower oil supply risks could eventually reduce inflationary pressure, although uncertainty surrounding the negotiations remains elevated. Iran’s security chief, Mohsen Rezaei, said on Friday that Tehran was preparing a list of conditions for reopening the Strait of Hormuz following a request from mediators, Reuters reported. The reported conditions include ending the war in the region, highlighting the complexity of the diplomatic process. While the latest developments have offered some relief to financial markets, investors remain cautious because the reopening of the strategic shipping route is not guaranteed. Gold (XAU/USD) is trading around $4,610 after consolidating following its recent advance toward $4,697. Despite the short-term correction, the broader technical outlook remains constructive on the higher timeframes. On the H4 chart, gold maintains a modest bullish structure while holding above the 100-period and 200-period Simple Moving Averages (SMAs), positioned near $4,449 and $4,254, respectively. However, the price remains below the 20-period SMA around $4,630–$4,631. This moving average is currently acting as dynamic resistance and could determine whether buyers regain control of the short-term trend. The 50-period SMA remains below the current market price and continues to provide underlying support for the broader bullish setup. On the downside, important demand has developed around the $4,565–$4,580 area, which coincides with recent weekly lows, while a deeper support zone can be found near $4,555. Holding above this region would keep the current decline within the boundaries of a normal corrective move. On the upside, immediate supply is concentrated between $4,630 and $4,665, where the 20-period SMA overlaps with previous rejection levels, while stronger resistance sits around $4,680–$4,720. On the H1 chart, gold price action is currently neutral to mildly bearish in the short term, with XAU/USD consolidating below the key $4,600–$4,605 resistance area after sellers rejected higher levels. The 20-period and 50-period SMAs remain important dynamic indicators, with the faster average likely to influence near-term momentum and the 50-period SMA potentially providing additional support during pullbacks. Immediate demand is located around $4,570–$4,585, supported by recent lows and previous price structure. On the upside, resistance remains visible around $4,620–$4,630, followed by a stronger rejection zone between $4,660 and $4,690. A sustained breakout above these resistance areas could revive bullish momentum and bring the recent highs back into focus, while a clear break below $4,570 would increase the possibility of a deeper correction.