Gold Price Forecast: XAU/USD holds steady near $4,850 amid hopes of new peace talks
- Gold trades broadly unchanged above $4,800, with upside attempts limited below $4,850.
- Hopes of a new round of US-Iran negotiations keep precious metals buoyed.
- Frictions around the blockade in the Strait of Hormuz are weighing on risk appetite.
Gold’s (XAU/USD) nurses minor gains in an “inside day” on Thursday, trading at around $4,820, with price action constrained within Wednesday’s ranges. Hopes of new peace talks between the US and Iran keep precious metals buoyed, but the XAU/USD pair is failing to break resistance at the $4,850 area.
US President Donald Trump boosted market sentiment on Wednesday by confirming that negotiations with Tehran are underway and expressing confidence that the peace talks might resume in the coming days.
Investors’ optimism, however, has been curbed as the standoff over the Strait of Hormuz blockade continues. The US Central Command (Centcom) announced on Wednesday that it has closed traffic in and out of Iran’s ports, in an attempt to force Tehran to close a deal. In response, Iran’s military threatened to shut sea traffic in the Red Sea, the Persian Gulf, and the Sea of Oman, casting doubts about the ongoing ceasefire.
Technical Analysis: Above $4,850, the target is the $5,000 area
XAU/USD maintains a near-term bullish bias, but price action remains capped below the top of the last two weeks' horizontal channel at around $4,850.
Momentum indicators are showing mixed trends. The 4-hour Relative Strength Index is hovering around 59, in positive territory, but the Moving Average Convergence Divergence (MACD) hints at consolidation rather than a clear reversal.
Bulls need to break resistance at the $4,850 area (April 8, 14 and 15 highs), which would expose a previous support-turned-resistance right above $5,000. Further up, the next upside target would be the March 10 high at $5,235.
On the downside, Wednesday's lows right below $4,800 are holding bears for now. The key support level, however, is the bottom of the recent range around $4,600. A confirmation below here would negate the bullish view and add pressure toward the March 26 lows at the $4,350 area.
(The technical analysis of this story was written with the help of an AI tool.)
Gold FAQs
Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
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