24.08.202613:05 Forex Analysis & Reviews: XAU/USD – Price Analysis and Forecast: Gold Attracts Buyers

Gold (XAU/USD) reached a new high in mid-May, trading above the round-number level of $4,600.

Reduced expectations of an imminent Federal Reserve (Fed) interest-rate hike, together with lower Treasury yields, is keeping the US dollar near a three-month low and supporting the positive outlook for the precious metal.

Meanwhile, traders continue to assess the probability of at least one Fed rate hike by the end of the year at more than 70% amid inflationary risks associated with unstable oil prices.

At a press conference on Monday, US Treasury Secretary Scott Bessent is expected to announce what he considers the strictest sanctions in history against Iran. In response, Mohsen Rezaei, Secretary of Iran's Supreme National Security Council, warned that the Islamic Republic would halt oil exports through the Strait of Hormuz and other Persian Gulf ports if the economic confrontation continues. Rezaei added that any country's participation in US sanctions would be regarded as an act of war against Iran. This supports the US dollar and limits its decline, putting downward pressure on gold prices and requiring caution from gold bulls.

From a technical perspective, Friday's close above the round-number level of $4,600 was viewed as a new signal for XAU/USD buyers. In addition, the MACD indicator remains in positive territory, with its readings continuing to rise, indicating that the upward trend is continuing. However, the Relative Strength Index (RSI) at 71.77 indicates overbought conditions, which could limit short-term gains. On the other hand, the first significant support is located at the 200-day SMA and the round-number level of $4,500. A deeper support level is at $4,450.

The table below shows the percentage change in the US dollar against major currencies today. The US dollar showed the greatest strength against the Canadian dollar.