Gold Price Forecast: XAU/USD Slides to Lows Near $4,110 as Oil and Yields Rise

Selling pressure brings Gold towards $4,100 as losses continue for a fourth straight day.
Higher US yields and Oil prices lend support to the US Dollar.
Sellers target the monthly range low near $4,070.

Gold (XAU/USD) remains under pressure on Wednesday, recording a fourth successive day of losses as the US Dollar (USD) recovers modestly from Tuesday’s lows, supported by a moderate rise in US Treasury yields and firmer Oil prices. Across the Asian and European trading sessions, the precious metal has consolidated just above $4,100, bringing the key support zone near $4,070 increasingly into focus.

TMGM Analysis: Financial Market News, Economic Calendar & Market Insights

Demand for precious metals is weakening as elevated Oil prices keep risk appetite muted. With a US-Iran peace agreement still proving elusive and the conflict entering its eighth month with no end in sight, Brent Oil has gained 1.6% so far in the day.

Hopes for fresh US-Iran negotiations rose on Tuesday when Pakistan’s army chief Asim Munir arrived in Tehran. However, Iran’s refusal to send enriched nuclear material abroad caused the talks to collapse. Earlier, on Monday, US State Secretary Marco Rubio had stated that securing a peace agreement with Iran was extremely difficult and that the US would keep up economic pressure on the Islamic Republic.

Speaking to Iranian media, Iranian Foreign Minister Abbas Araghchi said the Strait of Hormuz would stay closed until Washington accepted Iran’s conditions.

Technical Analysis: Can Gold hold the $4,070 range low as it draws nearer?

Following a decline of nearly 1.3% over the past three trading days, XAU/USD is trading just under $4,120, with upside remaining limited. Bearish momentum is reinforced by the 4-hour Relative Strength Index (14), which sits in neutral-to-weak territory, while the MACD (12, 26, 9) remains negative. Together, these signals suggest that attempts at recovery remain vulnerable.

Although selling pressure has so far been contained above the $4,100 area, marked by the intraday lows, the lower end of October’s trading range near $4,070 is now in view. A break below that level is likely to require fresh impetus for sellers before they can target the late July and early August lows around the psychological $4,000 area.

Any recovery, by contrast, is likely to encounter a test in the $4,190-$4,200 zone, which has repeatedly restricted gains over the past few days. Beyond this, the upper end of October’s range is positioned near $4,230.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

Gold: Common Questions Answered

What makes Gold an investment choice?

Widely regarded as a safe-haven asset, Gold is considered a good investment during periods of turbulence, beyond its appeal for its lustre and use in jewellery. Its importance throughout human history stems from its extensive use as both a store of value and a medium of exchange. Since it does not depend on a particular issuer or government, the precious metal is also commonly viewed as a hedge against inflation and currency depreciation.

Which buyers hold the largest Gold reserves?

The largest holders of Gold are central banks. To support their currencies during unsettled periods, they typically diversify reserves and purchase Gold, helping strengthen perceptions of both the economy and the currency. Substantial Gold holdings can reinforce confidence in a country’s solvency. According to World Gold Council data, central banks increased their reserves by 1,136 tonnes of Gold, valued at around $70 billion, in 2022. No higher annual purchase has been recorded since records began. Emerging-economy central banks, including those in China, India and Turkey, are rapidly building their Gold reserves.

How does Gold move relative to other assets?

An inverse relationship links Gold with the US Dollar and US Treasuries, both of which are key reserve and safe-haven assets. Dollar weakness generally supports Gold, allowing investors and central banks to diversify their holdings during turbulent periods. Risk assets also tend to move in the opposite direction to Gold: stock market rallies usually put pressure on the metal’s price, whereas selling in riskier markets tends to support it.

Which factors influence Gold prices?

Gold responds to a broad mix of influences. Its safe-haven appeal means geopolitical unrest or concerns about a severe recession can trigger a rapid price increase. Because the metal offers no yield, lower interest rates generally support it, while a higher cost of money usually weighs on prices. Nevertheless, the US Dollar (USD) drives most price movements, given that Gold is dollar-denominated (XAU/USD). Dollar strength tends to restrain Gold prices; a weaker Dollar, by contrast, is likely to lift them.