FX.co ★ XAU/USD, GOLD

Technical and Fundamental Analysis of the Gold(XAU/USD) Gold prices remained under pressure during Wednesday’s Asian trading session as XAU/USD attempted to stabilize near the 4,705 region following a sharp retreat from the recent three-week high around 4,774. The latest correction in gold prices was largely driven by renewed strength in the US dollar, rising US Treasury yields, and growing expectations that the Federal Reserve may maintain higher interest rates for a longer period after hotter-than-expected US inflation data. According to recent economic data, the US Consumer Price Index rose by 3.8% year-over-year in April, marking the strongest annual inflation increase since May 2023. Rising energy prices linked to the ongoing Iran conflict contributed heavily to the inflation surge, increasing concerns that the Federal Reserve could delay future rate cuts or even maintain a more aggressive monetary stance for an extended period. Additional downside pressure on gold emerged from developments in India, one of the world’s largest gold consumers. ****** Prime Minister Narendra Modi urged citizens to avoid purchasing gold for the next year in an effort to protect the country’s foreign exchange reserves. At the same time, the ****** government announced a significant increase in import tariffs on both gold and silver, raising duties from 6% to 15%. The move aims to reduce pressure on India’s external reserves and limit precious metal imports, but it also weakened broader market sentiment toward gold by raising concerns about softer physical demand from a key global buyer. Gold continues trading within a volatile but broader bullish structure despite recent downside pressure. On the H4 timeframe, XAU/USD recently faced aggressive selling from the major supply zone between 4,720 and 4,750, where sellers regained control after repeated rejection attempts near recent highs. This resistance area has become the primary short-term supply cluster and continues limiting bullish continuation. The rejection from this zone pushed price below the H4 20-period Simple Moving Average near the 4,708 region, signaling weakening short-term momentum and increasing bearish pressure across lower timeframes. The H4 timeframe also highlights a major dynamic resistance structure around the 4,730–4,750 region, where the 50-period SMA aligns closely with previous rejection highs and institutional selling activity. This confluence strengthens the importance of the resistance zone and makes it a critical technical barrier for bulls. A confirmed breakout above 4,750 accompanied by strong bullish volume could significantly improve market sentiment and potentially trigger another rally toward the 4,760–4,785 region, followed by psychological resistance near 4,800. On the downside, the most important H4 demand zone is positioned between 4,650 and 4,680, where buyers previously entered the market aggressively during earlier pullbacks. This support area aligns closely with the H4 100-period and 200-period Simple Moving Averages, making it one of the strongest technical demand clusters supporting the broader bullish trend structure. However, a decisive breakdown below this region could accelerate bearish momentum and expose deeper support targets near 4,630–4,650 and eventually the broader 4,560–4,580 demand area. On the H1 timeframe, price action continues reflecting consolidation and indecision following the recent sharp correction from multi-week highs. Immediate resistance remains concentrated between 4,720 and 4,740, where recent intraday rallies repeatedly stalled due to strong selling pressure and fading bullish momentum. Above that, a stronger supply remains positioned near 4,760–4,785, representing the broader upper resistance zone formed from previous swing highs and failed breakout attempts. Buyers would likely require a decisive reclaim of both the H1 20-period SMA and the broader resistance cluster before stronger upside continuation toward 4,800 becomes technically viable. Short-term support on the H1 chart is currently positioned between 4,670 and 4,690, where buyers continue defending recent lows during intraday pullbacks. This region acts as the first immediate demand zone beneath current price action and remains important for maintaining short-term market stability. A deeper support base is located between 4,630 and 4,650, where broader accumulation activity previously emerged during corrective declines. If sellers manage to force a breakdown beneath these support clusters, bearish momentum could strengthen considerably and potentially drive gold prices toward the broader 4,560–4,580 structural support region. On the H1 timeframe, the shorter-term SMAs have started flattening and crossing bearishly, indicating fading bullish momentum and the possibility of further consolidation or corrective movement. However, any successful reclaim of the H1 20-period SMA could improve short-term sentiment and encourage another attempt toward upper resistance zones. Meanwhile, the broader bullish structure remains supported by gold trading well above the long-term 200-day SMA near 4,328, confirming that the larger trend remains constructive despite recent volatility and profit-taking activity.