FX.co ★ GokBoruHunter | XAU/USD, GOLD

Gold (XAU/USD) H4 Outlook Update XAU/USD gold prices trade with minor gains near $3,900 during Monday's European session, even though buyers have not managed to sustain the move higher without clear fundamental triggers. The USD faces selling pressure amid expectations of a possible diplomatic solution to the ongoing US-Iranian war, providing some support to gold. Meanwhile, the USD remains under pressure amid expectations of a Fed rate hike amid rising inflation concerns driven by soaring oil prices, keeping XAU/USD near its October 2025 lows seen on Friday. According to news reports, the Iranian diplomats held a third day of negotiations with the mediators from Qatar on Sunday to help reach an agreement on ending the US-Israeli war against Iran. Moreover, Iran has offered a plan to reopen the Strait of Hormuz within 48 hours if the US meets several requirements, such as lifting sanctions imposed under the Islamabad memorandum and reducing US troops in the region. US President Donald Trump noted good progress in negotiations with Iran, where the latter wants to reach an agreement. However, Trump said he has not ruled out further military action following the 3rd of November midterm election results. Besides, the Supreme Leader of Iran, Mohamad Khamenei, instructed his military commanders to gear up for the next clash with the US and Israel, and to enhance options for retaliation. This, coupled with new assaults by Ukraine on Russian oil refineries, keeps the geopolitical risk premium alive and USD bears under pressure, so we should be cautious about positioning for further gains in Gold prices. On the other hand, US macro numbers reported last Thursday indicated economic expansion and inflationary pressures, raising expectations of further Fed tightening. According to CME Group's FedWatch Tool, traders currently anticipate a 75% probability of another interest rate hike by the US central bank in December. Therefore, robust follow-through buying is required to signal a near-term bottom in the XAU/USD pair, since the next focus will be key US macro releases due at the start of a new month. The US ISM Manufacturing PMI will be releasedbe released today. On Wednesday, ISM Services PMI will follow, leading to the Nonfarm Payrolls (NFP) economic indicator on Friday, which market participants expect due to its close correlation with the overall economy's performance. In this fundamental environment, any recovery would most likely be sold and capped. The Friday drop below the critical psychological level of $4,000 was a major factor fueling the bears. In addition, the yellow metal is firmly trading below the 100-period Exponential Moving Average (EMA) on the 4-hour time frame, supporting the near-term bearish trend. The MACD oscillator remains negative, with the MACD line below the signal line and a weak histogram. However, it should be noted that the RSI indicator at 28.94 stays in the oversold area, showing that despite the bearish pressure being dominant, the recent drop might not have enough room to expand in the short term. However, any further rise is more likely to meet selling interest and fail near the 100-period EMA at $4,068.55, a key level bulls must reclaim to reduce the current bearish momentum. On the other hand, a break of Friday's swing low near $3,870 will help bears extend the established downtrend.