FX.co ★ XAU/USD, GOLD

Gold prices (XAU/USD) showed resilience, rebounding from a slight dip to $4,254 and settling above $4,280, primarily driven by fluctuations in oil prices and a slight decline in benchmark US Treasury yields. Earlier reports of progress in diplomatic negotiations between the US and Iran led to a drop of more than 3% in West Texas Intermediate (WTI) crude oil prices to around $91 per barrel, which helped stabilize gold prices and eased short-term concerns about energy-driven inflation. Meanwhile, the US Dollar Index (DXY) fell 0.22% to 101.02, while the benchmark 10-year US Treasury yield edged down by about two basis points to 5.192%. Despite continued market expectations of monetary policy tightening, these negative factors temporarily relieved pressure on gold yields. The underlying data released highlighted the complexity of the US macroeconomic situation. Core durable goods orders in August exceeded expectations, and July's data was revised upwards, indicating continued strong business spending. However, consumer confidence declined sharply due to persistent cost-of-living pressures. The University of Michigan's consumer sentiment index fell to 48.1 in September, its lowest level in four months. These inflationary concerns prompted consumers to raise their one-year inflation expectations from 4.0% to 4.6%, and their five- to ten-year inflation expectations to 3.4%. This ongoing inflationary environment has significantly impacted market expectations regarding central banks. Interest rate futures indicate a roughly 64% probability of the Federal Reserve raising interest rates again at its next meeting in October, and a 93% probability of a rate hike in December. Technically, despite the recent recovery, the short-term trend for the gold/US dollar pair (XAU/USD) remains predominantly bearish. The spot exchange rate continues to fluctuate within a limited rising wedge pattern and is hovering below a set of moving averages. The pair is facing strong resistance from the 50- and 100-day simple moving averages (SMAs), which are converging between $4304 and $4312, placing it above the key psychological support level of $4300. Momentum indicators reinforce this cautious technical analysis, with the 14-day Relative Strength Index (RSI) remaining below the neutral 50 level. To form a bearish continuation pattern, the gold/US dollar pair (XAU/USD) must decisively break the lower boundary of the wedge pattern near the support zone between $4200 and $4210. Such a break would invalidate the corrective structure and open the door for further declines, potentially reaching the August 3 low of $4019, with the key psychological support level of $4000 acting as a pivot point. On the other hand, if the bulls succeed in achieving a more sustainable rise, the immediate resistance lies at the $4,300 level, followed by the $4,350 level, with stronger resistance around the $4,400 level.