01.05.202623:08 Forex Analysis & Reviews: XAU/USD Price Analysis and Forecast: Gold Shows Weak Momentum Amid Mixed Fundamental Signals

Gold (XAU/USD) continued a moderate intraday decline, falling below the round level of $4,600 and partially giving up the gains made the previous day, though it has currently recovered some of its intraday losses. Based on current dynamics, the precious metal is set to end a second consecutive week in negative territory, holding near a monthly low around $4,510 recorded on Wednesday.

Geopolitical tensions related to stalled negotiations between the United States and Iran continue to support high oil prices, thereby strengthening inflation expectations.

Against this backdrop, expectations of tighter monetary policy from major central banks, including the Federal Reserve (Fed), are increasing, which acts as a significant pressure factor on gold, a non-yielding asset.

U.S. President Donald Trump rejected Iran's initiative to reopen the Strait of Hormuz and lift the blockade, postponing discussions on the nuclear program to a later date. He also emphasized that the naval blockade would remain in place until Tehran agrees to terms addressing Washington's concerns over nuclear development. Additional signals suggest that the U.S. may consider new military measures against Iran. This heightens the risk of further escalation, supports demand for the U.S. dollar as a reserve currency, and creates additional pressure on gold prices.

Meanwhile, on Wednesday, the Fed kept its benchmark interest rate unchanged within the 3.50%–3.75% range. However, the decision was accompanied by the highest number of dissenting votes since 1992, with three FOMC members opposing the continuation of a dovish tone in the regulator's statement. Additionally, macroeconomic data released on Thursday indicated accelerating inflation in March and resilient economic activity, reinforcing expectations that rates will remain at current levels through next year. These factors limit the potential for dollar weakening and strengthen the case for further declines in gold prices.

According to data from the U.S. Bureau of Economic Analysis, the PCE index rose by 0.7% month-over-month in March, while annual inflation accelerated to 3.5% from 2.8% the previous month. Core PCE, which excludes volatile components, increased to 3.2% year-over-year compared to 3.0% in February. In addition, the preliminary estimate of GDP showed that the U.S. economy grew at an annualized rate of 2.0% in the first quarter of 2026, significantly higher than the revised 0.5% in Q4 2025. At the same time, the probability of at least one 25-basis-point Fed rate cut in 2026 rose above 15%, up from a low of 1.3% the previous day. This limits aggressive dollar buying and may provide some support to gold.

Market focus is shifting to key U.S. macroeconomic releases at the start of the new month, particularly the ISM Manufacturing PMI, which will be published later on Friday. Further influence on the dollar and precious metals markets will come from developments in the Middle East.

From a technical perspective, oscillators are negative; support is at $4,550 and resistance at $4,650. For bulls to gain a chance of control, they first need to break above the 20-day SMA, but for now, the market remains in the hands of bears.