FX.co ★ XAU/USD, GOLD

Gold (XAU/USD) is replicating the negative price action observed during Asian trading hours on Monday, as sellers return in force early Tuesday to aggressively test critical technical support situated just above the $4,400 round-number threshold. The precious metal is fading its recent attempt at a recovery from eight-day lows around $4,397, primarily hindered by a sharp rebound in the US Dollar (USD) alongside rising US Treasury bond yields across the entire curve within a prevailing risk-off market environment. The Greenback continues to derive solid fundamental backing from escalating market expectations regarding a potential Federal Reserve interest rate hike at its upcoming September policy meeting, catalyzed by Fed Chair Kevin Warsh’s explicit hawkish signals at the Jackson Hole Symposium that further rate increases may be required to firmly subdue inflation. According to the CME Group’s FedWatch Tool, futures traders are now pricing in a 66% probability of a September rate lift-off, marking a substantial increase from the 41% chance priced in just a week ago. This aggressive repricing toward tighter monetary policy raises the opportunity cost of holding non-yielding bullion, keeping Gold prices under pressure while bolstering the Greenback. Adding to the complex macro backdrop, the renewed flare-up of direct military conflict in the Middle East has injected fresh geopolitical risk premia into global markets. Rather than boosting bullion, these developments have predominantly underpinned the safe-haven demand for the US Dollar, creating a direct headwind for USD-denominated commodities. Geopolitical tensions heightened after US President Donald Trump threatened additional military action against Iran following the first direct exchange of military strikes in a month. Concurrently, maritime security anxieties in the region surged as the United Kingdom Maritime Trade Operations (UKMTO) reported that a commercial tanker was struck by three projectiles while exiting the strategic Strait of Hormuz. Despite these persistent geopolitical threats, traders are increasingly balancing safe-haven dynamics against a dense calendar of incoming high-impact US economic indicators. The market is eyeing key labor market releases this week to gauge the Fed's future policy trajectory, starting with Tuesday's US JOLTS Job Openings survey and the ISM Manufacturing Employment Index, followed by Wednesday’s ADP Employment Change report and concluding with Friday's crucial Nonfarm Payrolls (NFP) report. Market strategists at ING emphasize that while ongoing central bank purchases and structural geopolitical risks continue to establish an underlying floor for bullion, a stronger US Dollar and higher-for-longer Fed interest rate expectations are likely to restrict near-term upside, causing any potential price rallies to struggle for sustained bullish momentum while monetary conditions remain tight. From a technical perspective on the daily chart, XAU/USD is currently oscillating around $4,431.95, maintaining a constructive broader posture as price holds slightly above the key 21-day Simple Moving Average (SMA) at $4,430.38. The metal also remains comfortably positioned above both its 100-day SMA at $4,366.40 and its 50-day SMA at $4,217.99, which together reinforce a well-supported medium-term uptrend structure. The 14-day Relative Strength Index (RSI) sits near 52.96 in neutral territory, signaling steady momentum rather than overstretched buying conditions following recent price swings. On the downside, initial dynamic support is anchored near the 21-day SMA at $4,430, followed by a stronger secondary demand zone around the 100-day SMA at $4,366 and the 50-day SMA near $4,218, where dip-buyers are expected to step in during deeper pullbacks. On the topside, immediate overhead resistance is clearly demarcated by the major 200-day SMA at $4,530.78. A decisive and sustained daily close above this long-term barrier would invalidate current corrective pressure and reopen the technical path for a broader continuation toward fresh historic highs.