Gold Price Forecast: XAU/USD remains vulnerable as sellers target $4,000

Gold (XAU/USD) is facing significant selling pressure as investors brace for potential further monetary tightening from the Federal Reserve. The metal has been dragged down by increasing inflation concerns fueled by higher oil prices, which keep US Treasury yields elevated and diminish its allure. Tensions between the United States and Iran have bolstered demand for the US Dollar, adding to the downside pressure on Gold.

Analysts are forecasting a 68% probability of another Fed rate hike in October, with upcoming Fed statements and key economic data expected to continue influencing the XAU/USD pair. Currently priced at $4,142.32, the gold price trades below both the 100-day simple moving average ($4,298.70) and the 200-day SMA ($4,540.39), indicating a bearish near-term outlook.

The pair is also below a descending trend-line near $4,305.00, suggesting that recent recoveries are capped within a broader corrective phase. The Relative Strength Index (14) stands at 35.69, just above the oversold level, signaling that downside momentum is easing but not yet reversed. Resistance levels on the upside include the 100-day SMA ($4,298.70) and the trend-line ($4,305.00), with stronger support at the 200-day SMA ($4,540.39) and the horizontal resistance at $4,697.00.

Downside support is found at the horizontal level of $3,941.00, where buyers may emerge to sustain the uptrend. A sustained break below the current area could propel the market further towards the $3,941 mark. In the four-hour chart, XAU/USD is continuing its descent below the key moving averages, maintaining a bearish near-term bias.

The 100-period and 200-period SMAs ($4,336.51 and $4,410.85) remain well above the current price, implying that the metal is in a corrective phase under heavy supply. The Relative Strength Index (14) has dropped to around 23, indicating oversold conditions, but this alone is insufficient to overcome the prevailing downside pressure while the price stays beneath the clustered moving-average barriers.

On the upside, the initial resistance is at the horizontal level near $4,250.00, followed by the 100-period SMA ($4,336.51) and the 200-period SMA ($4,410.85), with a higher resistance at $4,697.00. On the downside, immediate support is at $4,120.00, with a more robust support level around $4,000.00, which could be tested if oversold readings start attracting dip-buying interest.