XAU/USD Current price: $4,877
- The US Dollar gains ground as the Federal Reserve’s decision looms.
- Market participants expect policymakers to assess the impact of the Iran war on inflation.
- XAU/USD trades near fresh one-month lows as risk aversion boosts demand for the US Dollar.
Spot Gold fell to fresh one-month lows on Wednesday, in anticipation of the Federal Reserve (Fed) monetary policy announcement and following headlines indicating inflation in the United States (US) picked up even before the Iran war started.
The XAU/USD pair slid to $4,834 following the release of the US Producer Price Index (PPI), which rose 3.4% in February from a year earlier, higher than the expected and previous 2.9%. The core annual figure printed at 3.9%, following the 3.5% posted in January, while the PPI was up 0.7% in the month vs expectations of a 0.3$ advance.
Ever since the US and Israel decided to destroy Tehran’s nuclear power, the world has not been the same. Iran exerts control of the Strait of Hormuz, a critical passage for Persian Gulf oil. The war has resulted in interrupted traffic through the Strait, leading to supply disruptions and hence, skyrocketing Oil prices. Fears of increasing inflationary pressures have dominated financial markets ever since, disrupting whatever markets and even policymakers were thinking about monetary policy.
Knowing that US wholesale inflation soared even before the war started triggered risk aversion, sending Wall Street sharply lower while boosting demand for the safe-haven Greenback.
The Fed is widely anticipated to maintain the policy rate unchanged in the range of 3.5%-3.75%, with the focus on how policymakers assess the impact of the Iran war on inflation and future monetary policies. Meanwhile, US President Donald Trump shared his opinion in Truth Social: “When is ‘Too Late’ Powell lowering INTEREST RATES? President DJT”
XAU/USD short-term technical outlook
From a technical point of view, the 4-hour chart shows XAU/USD trades at $4,877.14. The near-term bias is bearish as price extends its slide well below the 20-, 100- and 200-period Simple Moving Averages (SMAs), with the shorter average now clearly rolling over beneath the longer ones and pointing to persistent selling pressure. The 200-period SMA holds above spot and flattens after a prior advance, framing the current move as a downside correction within a broader, slower uptrend. The Relative Strength Index (RSI) indicator sits in the low 20s after breaking below 30, signaling oversold conditions but not yet hinting at a reversal. The Momentum indicator remains below its midline and has stayed negative for several readings, reinforcing the prevailing downside bias.
In the daily chart, XAU/USD is mildly bearish as spot slips below a now flat 20-day SM near $5,120, while remaining well above the 100- and 200-day SMAs, which continue to trend higher. The 14-day Momentum indicator has dropped deeper below 0 and is maintaining its downward slope, reinforcing the short-term selling strength. Finally, the Relative Strength Index (RSI) indicator has retreated toward 41, also heading firmly lower and pointing to building bearish momentum.
Immediate resistance emerges at the former short-term floor around $5,000, followed by the 20-day SMA near $5,120, where a recovery would be needed to ease downside pressure and reopen the path toward the recent highs in the $5,260 area. On the downside, initial support aligns with the latest low at $4,830, with a clear break exposing a deeper pullback toward the rising 100-day SMA around $4,590 as the next notable cushion within the broader bullish structure. A daily close back above $5,120 would neutralize the current bearish bias, while sustained trading below $4,83i0 would confirm a more pronounced corrective phase.
(The technical analysis of this story was written with the help of an AI tool.)
