Gold Struggles to Extend Gains as Traders Await Key US PCE Inflation Data
Gold prices managed to hold on to modest intraday gains during the Asian trading session, although follow-through buying remained limited. Escalating tensions in the Middle East helped the safe-haven asset attract buyers near the lower end of the two-week trading range, allowing the metal to recover part of the losses recorded over the previous two sessions.
In his first public statement, Iran’s new Supreme Leader, Mojtaba Khamenei, warned that all US military bases in the region must be closed immediately or they could become targets of attack. The remarks added to geopolitical uncertainty and supported demand for safe-haven assets such as gold.
Technically, gold once again rebounded from the 200-period Exponential Moving Average (EMA) on the 4-hour chart. This support level continues to preserve the broader bullish trend structure despite the recent pullback, signaling caution for sellers in the XAU/USD pair.
Meanwhile, the Moving Average Convergence Divergence (MACD) indicator remains below its signal line and under the zero level. However, the latest contraction in negative readings suggests that bearish momentum is fading rather than accelerating. The Relative Strength Index (RSI), currently near 44, remains below the neutral 50 level but has recovered from oversold territory, indicating a corrective phase within a broader bullish bias rather than a completed market top.
Immediate support is seen around $5,090, where the latest intraday low aligns just above the 200-period EMA near $5,039, forming a key demand zone. A break below this area could expose deeper support toward the $5,000 psychological level.
On the upside, initial resistance appears near the recent swing high around $5,160. A sustained breakout above this level could pave the way toward $5,200, followed by the late-stage peak near $5,230.
A recovery above the $5,160–$5,200 range would likely pull the MACD back toward the zero line and push the RSI closer to 50, strengthening the bullish bias. Conversely, failure to hold the $5,090–$5,039 support cluster could shift the short-term outlook on the 4-hour chart toward a more neutral or even bearish tone.
Middle East Tensions and Fed Rate Outlook Influence Gold Market
Geopolitical tensions remain a key driver for gold. Iran’s Supreme Leader Mojtaba Khamenei reiterated that attacks on US military bases in the region could continue, even as Iran claims to maintain goodwill with neighboring countries.
At the same time, US President Donald Trump stated that stopping what he called Iran’s “evil empire” is more important than oil prices. Since the beginning of the US-Israel conflict involving Iran, crude oil prices have continued to climb.
Adding to market concerns, fears of supply disruptions from a potential closure of the Strait of Hormuz have raised the risk of rising global inflation. This development has prompted investors to rapidly reduce expectations for Federal Reserve interest rate cuts in 2026.
As a result, US Treasury yields remain elevated, supporting demand for the US Dollar (USD) and limiting gains for non-yielding assets such as gold ahead of the upcoming US Personal Consumption Expenditures (PCE) Price Index release.
The PCE inflation report is expected to play a crucial role in shaping market expectations for the Federal Reserve’s policy outlook, particularly as concerns grow that the ongoing conflict could trigger higher consumer prices.
This dynamic could significantly influence USD demand and provide further direction for gold prices. Nevertheless, geopolitical developments remain the primary focus for investors.
Despite the recent rebound, the XAU/USD pair appears on track to record its second consecutive weekly loss. Mixed fundamental factors suggest traders should remain cautious before placing aggressive directional bets, even as the broader trend still leaves room for potential upside in gold prices.