Gold (XAU/USD) price remains steady on Friday, poised to finish the week with gains of almost 2% as the US Dollar tumbles amid optimism about Iran-US talks in Pakistan throughout the weekend. Also, a mildly high US inflation report trimmed the Federal Reserve's (Fed) dovish bets for 2026. The XAU/USD pair trades at $4,763, up 0.01%.
Gold's faith in US-Iran talks
An improvement in risk appetite pushed bullion prices higher, even though Israel's attacks on Lebanon continued, threatening to end the two-week ceasefire agreed by the US and Iran. On the other hand, Tehran has also failed to open the Strait of Hormuz, which US President Donald Trump qualified as "dishonorable, some would say, of allowing Oil to go through the Strait of Hormuz. That is not the agreement we have!"
Talks between the US and Iran will begin on Saturday. The Iranian delegation will participate in the negotiations despite several statements indicating that Lebanon is part of the truce deal, Al Hadath reported.
US Vice President JD Vance is on his way to Pakistan and commented that "if the Iranians are willing to negotiate in good faith, we're certainly willing to extend the open hand. If they're going to try to play us, then they're going to find the negotiating team is not that receptive."
US inflation sticks to 3%; what would the Fed do?
Data from the US showed that March inflation met forecasts, as the US Consumer Price Index (CPI) increased by 3.3% YoY, up from 2.4% in February. Core CPI also rose from 2.5% to 2.6% YoY, below estimates of 2.7%. Consequently, investors remain skeptical that the Federal Reserve will reduce borrowing costs and expect the Fed funds rate to remain unchanged in the 3.50%-3.75% range for the rest of 2026, according to data from Prime Market Terminal (PMT).
Aside from this, the University of Michigan (UoM) Consumer Sentiment tanked to a record low in April, falling from 53.3 to 47.6. At the same time, American households expect inflation to pick up over the next 12 months, rising from 3.8% to 4.8%, blamed on the Middle East war, which pushed prices at the pump higher.
San Francisco Fed President Mary Daly downplayed the CPI surprise, saying it was expected, and flagged the ceasefire as the key variable. She added that the policy is restrictive enough to tame inflation while still supporting jobs.
In the meantime, the US Dollar Index (DXY), which tracks the buck's performance against six currencies, is down 0.13% at 98.66, near a four-week low, a tailwind for Gold prices.
Next week, the US economic docket will feature housing data, the Producer Price Index (PPI), jobs data, and Fed speakers. However, Gold traders would eye the resumption of the US-Iran first round of talks in Pakistan, along with the reopening of the Strait of Hormuz.
XAU/USD technical outlook: Rejected at $4,800, bears target 20-, 100-day SMA confluence
Gold price remains upwardly biased but has struggled to clear key resistance over the last two days. Three days ago, bullion hit a three-week high at $4,857, but buyers were unable to keep spot prices above the psychological $4,800 level.
If sellers push Gold below $4,750, a move towards the $4,700 mark is on the cards. Below here, the confluence of the 20- and 100-day Simple Moving Averages (SMAs), each at $4,674-$4,662, is up next.
Conversely, if Gold reclaims $4,800, it exposes the April 8 daily high at $4,857. On further strength, buyers could conquer the $4,900.
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