Gold (XAU/USD) extends its sharp intraday rejection slide from the $4,800 mark, or a two-week high, and dives to mid-$4,500s heading into the European session on Thursday amid a broad-based US Dollar (USD) rally. Addressing the nation, US President Donald Trump threatened that Iran would be hit extremely hard over the next two to three weeks and would be brought to the Stone Age if no deal is reached. This tempers hopes for de-escalation of tensions in the Middle East and weighs on investors' sentiment, bolstering the USD's status as the global reserve currency and exerting heavy downward pressure on the commodity.
Meanwhile, Trump added that Iranian energy infrastructure remains a possible target. Adding to this, the Wall Street Journal reported on Tuesday that the United Arab Emirates (UAE) is pushing for military action to reopen the Strait of Hormuz and is lobbying for a UN Security Council resolution to authorize such an operation. This, in turn, triggered a sharp rally in Crude Oil prices, reigniting inflationary concerns and reaffirming bets for a rate hike by the US Federal Reserve (Fed). The outlook lifts US Treasury bond yields, which provides an additional boost to the USD and contributes to driving flows away from the non-yielding Gold.
The precious metal falls around $150 from the Asian session peak, and the volatility is expected to remain elevated as investors continue to react to the incoming geopolitical headlines. Given that the Gold price remains highly sensitive to developments surrounding the ongoing conflict in the Middle East, the immediate reaction to the closely-watched US Nonfarm Payrolls (NFP) report on Friday is more likely to be limited. Nevertheless, the fundamental backdrop warrants some caution before positioning for an extension of the recent goodish rebound from the $4,100 mark, or a four-month low set last week.
XAU/USD 4-hour chart
Gold bears have the upper hand following intraday failure near $4,800/200-EMA on H4
From a technical perspective, Thursday's failure near the 200-period Exponential Moving Average (EMA) support breakpoint, now turned resistance on the 4-hour chart, and the $4,800 mark favors the XAU/USD bears. Moreover, the Relative Strength Index (RSI) drops back toward the mid-50s from overbought territory above 70, while the Moving Average Convergence Divergence (MACD) indicator (MACD) pulls back from recent highs, suggesting fading upside pressure rather than an outright reversal at this stage.
Meanwhile, some follow-through selling below the daily swing low near $4,554-$4,553 could drag the Gold price to the next support just below the $4,500 psychological mark, where prior demand converged with the latest momentum cool-off. A loss of this level would open the way toward $4,400. On the upside, initial resistance emerges at the recent swing high near $4,765, with a break above exposing the $4,820–$4,830 band where the 200-period exponential moving average reinforces a tougher barrier.
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