Gold Price Forecast: XAU/USD steadies near $4.400 lows amid rising Fed tightening bets

Gold (XAU/USD) remained relatively stable near $4.450 on Monday, failing to break away from last week's lows of the $4,400 range due to a combination of rising Federal Reserve (Fed) tightening expectations and the resumption of hostilities in Iran. This cautious sentiment was further fueled by the hawkish remarks made by Fed Chairman Kevin Warsh during the Jackson Hole summit who emphasized the need for policymakers to focus on prices and acknowledged the central bank's work to bring inflation back to its 2% target.

The FedWatch Tool reflected a 61% probability of a September rate hike, up from 36% just a day before.

Tensions between the US and Iran escalated on Sunday, with the US military launching an attack on the Iranian island of Larak where Iranian forces were allegedly preparing missiles to place sea mines in the Strait of Hormuz. Tehran retaliated by targeting US airbases in Jordan and the United Arab Emirates, contributing to a risk-off reaction that bolstered the safe-haven value of the US Dollar, thus weighing on precious metals.

The technical analysis, assisted by an AI tool, revealed that Gold had dipped below its crucial 200-day simple moving average (SMA) of $4,528, a signal that has historically been favorable for bears. Momentum indicators painted a bearish outlook, with the Relative Strength Index (RSI) hovering around 54.36, indicating a more balanced stance, and the Moving Average Convergence Divergence (MACD) indicator moving into negative territory, suggesting waning upside momentum and potential for further consolidation or downside moves.

Support levels were identified at the Friday's floor near $4,400, followed by the August 14 low around $4,310 and the August 6 low near $4,225. However, bulls faced challenges at the 200-day SMA of $4,528 and the August 27 low of $4,565, as the precious metal struggled to regain momentum beyond last week's highs, which were around $4,700.