Gold flat lines above $4,050 as Fed hike bets and Iran uncertainty support safe-haven USD
Gold (XAU/USD) seesaws between tepid gains and minor losses during the Asian session on Tuesday as traders seem hesitant and opt to wait for further developments surrounding the Middle East crisis.
Gold hovered around the $4,050 mark on Tuesday as the US Dollar (USD) gained strength due to expectations of further Federal Reserve (Fed) rate hikes and concerns over the Iran-US situation. Traders appeared hesitant, waiting for more developments in the Middle East, which impacted gold prices. However, the uncertainty surrounding US-Iran peace talks limited the downside for the USD.
The recovery in oil prices also kept inflation risks and the possibility of Fed rate hikes in the back of traders' minds, thus capping the gold's upward potential. The US ISM PMI released on Monday showed a surge in manufacturing activity, solidifying bullish sentiment for the USD. Nonetheless, traders are likely to remain cautious and wait for the much-anticipated Nonfarm Payrolls (NFP) report, released on Friday, to gauge the Fed's upcoming policy direction.
The Gold price, in a technical standpoint, is currently trading below its 200-day Simple Moving Average (SMA) and exhibits a bearish bias within a trading range observed over the past month. Momentum indicators also do not support a clear recovery, suggesting further downside risks. The immediate support level for the XAU/USD pair is expected to be found around the $3,976–$4,000 range, where previous support was seen.
If the pair breaks below this zone, it may face further selling pressure, leading to a potential decline.
Written by urgent.news from FXStreet's reporting — not their text. Machine-written — it may contain errors, so check the original before relying on it.
