Gold Price Forecast: U.S.-Iran Negotiations Face Uncertainties, Gold May Fall Below $4,400

TradingKey - During the Asian session on May 26, gold prices ( XAUUSD) weakened under pressure after briefly touching the $4,580 resistance level, maintaining a weak trend intraday and potentially entering a new round of declines.

Market Focuses on U.S.-Iran Negotiations

From a fundamental perspective, the core driver of current gold price movements has become highly concentrated on the latest developments in U.S.-Iran negotiations.

On the U.S. side, Trump's latest remarks are clearly optimistic. Trump stated on Monday that negotiations between the U.S. and Iran are progressing smoothly, while emphasizing that hostilities could re-escalate if an agreement is not reached.

However, Iran's tone is notably more cautious. Iranian Foreign Ministry spokesperson Baghaei stated that while both sides have reached a degree of consensus on most issues, it is too early to say that an agreement is imminent. At the same time, he criticized the U.S. government's frequently shifting and contradictory positions for creating obstacles to the diplomatic process. Furthermore, Iran denied committing to give up its enriched uranium stockpiles, calling claims that Iran accepted a long-term suspension of uranium enrichment in the draft agreement "fabrications."

The latest statements from both the U.S. and Iran indicate that the window for negotiation remains open, but core disagreements remain unresolved. For gold, if the market believes a deal is nearing completion, it will drive gold prices higher; conversely, if both sides adopt a hardline stance again, gold prices will be pressured downward.

Notably, the U.S. continued military operations in southern Iran and near the Strait of Hormuz on Monday. U.S. Central Command described these actions as "self-defense strikes," targeting missile facilities and suspected mine-laying vessels. This indicates that even as negotiations proceed, military friction has not fully ceased.

Following the news, gold prices remained weak today, falling by more than $50 intraday, demonstrating that recent gold price trends continue to be dominated by the U.S.-Iran situation.

Technical Analysis: Gold Price May Fall to $4,360

Gold price daily chart, Source: TradingView

Looking at the gold daily chart, as the candlesticks gradually break below the 144-day moving average, gold's medium-to-long-term bullish trend has been invalidated, and overall market sentiment is shifting toward the bears.

Meanwhile, the bearish head-and-shoulders top pattern formed by the candlestick structure on the daily chart has significantly bolstered bearish momentum. Although gold prices rebounded on Monday, they weakened today under the resistance of the 10-day moving average, indicating that bearish momentum is stronger than bullish momentum.

Currently, the primary target for the decline will be to test the key support level at $4,460. If this level is breached, gold prices may open up downside room toward the $4,100 support level, with a potential further move toward the $4,000 psychological mark.