FX.co ★ Crude | XAU/USD, GOLD

Gold (XAU/USD) prices recently rebounded from a one-week low, holding above $4,400 at the start of the European trading session. This rally temporarily ended a three-day losing streak for gold, primarily driven by a weaker dollar, which remains under pressure near two-week lows. The dollar's weakness stems from the Bank of Japan's efforts to strengthen the yen, coupled with prevailing market uncertainty regarding the direction of global monetary policy. However, market analysts maintain that the generally hawkish outlook of major central banks could severely limit the rapid rise in non-interest-bearing assets like gold. The outlook for global monetary policy remains highly uncertain. The market generally anticipates a 25-basis-point rate hike by the European Central Bank, and traders have priced in expectations of similar tightening measures from the Bank of Japan at its upcoming meeting. The Reserve Bank of Australia is also considering similar action. Meanwhile, the US macroeconomic landscape shifted following a better-than-expected non-farm payrolls report, significantly bolstering market expectations for a Federal Reserve rate hike in September. Strategists at Bank of New York noted that strong jobs data reinforced market expectations of further monetary tightening, and despite previous cautious statements from Federal Reserve officials, the probability of another interest rate hike in September has risen above 60%. Adding to these hawkish concerns are escalating geopolitical tensions in the Middle East, where recent US military attacks on Iranian oil tankers near the Gulf of Oman and Haleq Island have prompted an Iranian missile response. These developments have pushed West Texas Intermediate crude prices to their highest level in three months, significantly increasing the geopolitical risk premium in the energy market and raising fresh concerns about inflation. This inflationary rhetoric, fueled by rising energy prices, underscores the need for the Federal Reserve to remain vigilant in the long term and provide fundamental support for the dollar while curbing the continued rise in gold prices. Therefore, market participants are closely watching upcoming US inflation indicators, particularly the Producer Price Index (PPI) and the Consumer Price Index (CPI), due later this week, as these will be key drivers for the gold/dollar exchange rate. Technically, precious metals found immediate support near the $4345-$4340 confluence, which cleverly combines the 200-period simple moving average on the four-hour chart with the 50% Fibonacci retracement level of the previous rally in July and August. Despite this defensive support, momentum indicators suggest that the current bounce reflects corrective consolidation above trend support rather than a strong uptrend. The daily Relative Strength Index (RSI) is hovering around 42, in neutral territory, while the Moving Average Convergence Divergence (MACD) remains in negative territory, indicating relatively weak bullish momentum overall. Any attempt to rise will face immediate technical resistance at the 38.2% Fibonacci retracement level near $4427. A break above this level would only allow access to the next upside resistance, the 23.6% Fibonacci retracement level near $4529. On the downside, initial support lies at the 200-period simple moving average (SMA) around $4352.88, followed by the 50.0% Fibonacci retracement level around $4344. A break below this key support zone could lead to further declines towards the Fibonacci retracement levels at $4262 and $4144, suggesting a prolonged short-term correction.