Gold stalls recovery from six-week low as USD preserves post-Fed gains amid Iran risks
Gold (XAU/USD) attracts some buyers during the Asian session on Thursday, though it struggles to find acceptance above the $4,300 mark and remains close to a near six-week low, touched the previous day.
Gold (XAU/USD) faces challenges in regaining momentum after hitting a near six-week low, as the US Dollar (USD) continues to strengthen following the Federal Reserve's hawkish stance. The US central bank voted to raise interest rates for the first time since 2023, indicating a strengthening US economy and rising geopolitical risks.
In response, the US Dollar has reached a fresh high since late July, bolstered by investor concerns over Iran-backed Houthi rebels carrying out over 450 air strikes in Yemen. The US Dollar's rising value also reflects concerns over persistently high energy prices, which could prompt further tightening by the Fed. This geopolitical tension and the threat of further US rate hikes keep the safe-haven USD in demand, potentially hindering gold's recovery.
The precious metal hovers near the $4,315-$4,320 confluence, a key area that could propel XAU/USD to new heights if broken. However, immediate support is found at the 61.8% Fibonacci retracement level at $4,226, with a deeper 78.6% level at $4,100 and a structural floor near $3,940.20. Technical indicators suggest waning downside momentum, with the Relative Strength Index around 44.
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