Gold (XAUUSD) prices remained rangebound as conflicting fundamental factors kept market sentiment balanced. A weaker US Dollar offered some support, but improving risk appetite and expectations of higher US interest rates limited stronger gains. Rising oil prices and escalating tensions in the Middle East also increased inflation concerns, supporting expectations that the Federal Reserve could maintain a restrictive policy stance. Attention now turns to the European Central Bank's policy decision and further developments in the Middle East for fresh market direction.
Gold Price Remains Rangebound as Oil-Driven Inflation Supports Fed Bets
Gold prices continued to consolidate after retreating from recent highs. The US Dollar remained under pressure as concerns over possible Japanese currency intervention reduced demand for the Dollar. Market participants stayed cautious because any intervention could pressure the USD/JPY pair and weigh further on the Dollar. However, the weaker Dollar provided only limited support to gold as broader fundamental factors continued to shape market sentiment.
Improving risk appetite also reduced demand for safe-haven assets. Strong earnings from Alphabet and Tesla boosted confidence in continued investment in artificial intelligence infrastructure. The positive corporate outlook lifted technology-related stocks and supported major Asian equity markets. A stronger preference for riskier assets reduced demand for gold despite continued pressure on the US Dollar.
At the same time, higher oil prices raised expectations that the Federal Reserve could keep interest rates elevated. The widening Middle East conflict also increased inflation concerns. Fresh US strikes on Iran and renewed Houthi attacks on oil tankers added to the uncertainty. Iran warned that it would retaliate against any attacks on its infrastructure following fresh threats from US President Donald Trump. Attention now turns to the European Central Bank policy decision, where a hawkish outlook could keep pressure on gold.
Gold Technical Analysis: XAU/USD Tests Ascending Broadening Wedge Support
The gold chart below shows a long-term ascending broadening wedge that has guided price action since late 2023. The lower boundary has repeatedly provided strong support during corrections, while the upper boundary has acted as resistance during major rallies. Price recently reached the upper trendline before reversing sharply, confirming renewed selling pressure near long-term resistance.
Gold has now corrected toward the lower boundary of the broadening wedge and is trading just above this important support zone. The latest rebound suggests buyers are attempting to defend the trendline after the recent decline from the record high. However, the recovery remains limited, and price continues to trade above key support.
A stronger rebound would improve the technical outlook and could support further upside. On the other hand, a decisive break below the lower wedge support could trigger a deeper correction toward the next major support levels. Price action around the current trendline will likely determine whether the broader bullish structure remains intact or shifts into a larger corrective phase.
Gold Outlook: Key Support Holds While Risk Appetite Limits Upside
Gold prices remain rangebound as mixed fundamental factors keep market sentiment balanced. A weaker US Dollar provides some support, while higher oil prices and expectations of restrictive Federal Reserve policy limit stronger gains. Technically, gold continues to hold above the lower boundary of the ascending broadening wedge. Price action around this support will likely determine the next major move. The European Central Bank's policy decision and developments in the Middle East remain key catalysts for gold prices.
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