Gold Holds Near Four-Week High as Stronger US Dollar Limits Gains
Gold prices remain under mild pressure below a near four-week high, though downside momentum is limited as the metal stays supported above the $4,800 level ahead of the European session. Uncertainty surrounding a lasting US-Iran agreement—amid ongoing instability in the Strait of Hormuz—has helped the US Dollar stage a modest rebound from early March lows, weighing on gold. Adding to tensions, Iran’s ambassador to the United Nations described the US blockade as a serious violation of Tehran’s sovereignty.
From a technical perspective, the XAU/USD pair maintains a constructive bullish bias, attempting to build momentum above the 200-period Simple Moving Average (SMA) on the 4-hour chart. Indicators continue to support the upside, with the Relative Strength Index (RSI) at 65.5, approaching overbought territory, while the Moving Average Convergence Divergence (MACD) remains firmly in positive territory. This suggests ongoing bullish pressure, although a potential slowdown could emerge if buying momentum fades.
Immediate resistance is seen at the 61.8% Fibonacci retracement level at $4,912.54. A sustained breakout above this level could pave the way toward the 78.6% retracement at $5,134.37, followed by the cycle peak near $5,416.94. On the downside, the 50% retracement of the March decline provides strong support at $4,756.73. A decisive break below this level may expose deeper supports at $4,600.92 (38.2%) and $4,408.14 (23.6%), where buyers are likely to re-enter on a more pronounced correction.
Geopolitical Developments and Market Sentiment
Cautious optimism dominated Asian markets on Wednesday following remarks from US President Donald Trump, who indicated that US-Iran peace talks could resume within the next two days. Trump also suggested that the conflict with Iran may be nearing its end.
Further supporting sentiment, US Vice President JD Vance confirmed that negotiations—facilitated through channels including Pakistan—are ongoing as both sides work toward a potential agreement. Meanwhile, signs of stabilization in the Strait of Hormuz, alongside easing oil prices due to the US naval blockade, have helped reduce inflation concerns and improve overall market sentiment.
Despite the recent recovery in risk appetite, investors remain cautious ahead of the next round of US-Iran negotiations, where a possible extension of the ceasefire may be discussed. However, reports from CNN citing satellite imagery indicate that Iran may be restoring access to its underground missile infrastructure during the ceasefire, highlighting the fragile and temporary nature of the current pause.
Given this backdrop, markets remain on edge as geopolitical risks persist. Safe-haven demand for the US Dollar continues to cap gold’s upside potential, with traders closely monitoring developments in the Middle East for the next major move in gold prices.