Xau/USD Current price: $3,383.60
- President Trump mentions that Iran’s patience may start to “wear thin.”
- Anticipation grows for US economic data as the markets prepare for the Federal Reserve’s decisions.
- Xau/USD is likely to trade within a narrow range influenced by updates on risk aversion.
Spot Gold hit a weekly low of $3,366.25 on Tuesday but bounced back during American trading hours. The US dollar held steady throughout the day while market players awaited macroeconomic data from the US, remaining cautious due to the ongoing situation in the Middle East.
The US reported a 0.9% decline in retail sales for May, contrasting with expectations of a slight drop (previous moves were -0.1% and -0.7% in April). Industrial production also fell, down 0.2%, while capacity utilization dipped to 77.4%, failing to meet the anticipated 77.7% mark.
Amid ongoing discussions about trade wars, European Commission President Ursula von der Leyen stated that trade negotiations with the US are progressing, despite the complexities. She pointed out that the EU continues to enjoy a trade surplus with the US.
In terms of the Middle East conflict, Trump remarked that the US military effectively controls Iran’s airspace, suggesting that US patience is “thin,” which increases risk aversion and contributes to losses in Xau/USD.
The situation remains dominated by US data releases, concerns in the Middle East, and a heightened demand for safe-haven assets.
The Federal Reserve is anticipated to maintain interest rates unchanged during its monetary policy announcement on Wednesday. Additionally, officials are set to provide an updated summary of economic forecasts, considering inflation, growth, and employment outlooks.
Xau/USD Short-Term Technical Outlook
The Xau/USD pair is currently trading in the $3,380 range. Daily charts indicate that the pair is moving within a narrower band. While it has lost some positive momentum, the overall risk seems skewed to the upside, as technical indicators have shifted significantly above the midline. The Xau/USD remains above all moving averages, although the 20-day simple moving average (SMA) is showing reduced bullish strength, still above the 100 and 200 SMAs.
In the short term, gold prices appear more subdued according to the four-hour chart, with the pair trading below the 20 SMA—projecting forward to around $3,406.90. Meanwhile, the 100 and 200 SMAs are showing no clear direction relative to current levels, and the technical indicators are trending negatively. Nonetheless, environments characterized by risk aversion may prevent further declines in the pair.
Support levels: 3,366.10 3,352.40 3,339.75
Resistance levels: 3,406.90 3,414.60 3,437.85
