Gold (XAU/USD) posted marginal gains on Monday, trading at $4,021, as the US Dollar's recovery stalled and oil prices retreated from recent highs. The precious metal remains capped below a descending trendline resistance, while downside attempts are supported above the $3,965 area, resulting in a descending triangle pattern on the charts [1]. Technical analysis indicates a triangle formation and bullish divergence in the Relative Strength Index (RSI), with the 4-hour RSI recovering toward neutral and the MACD turning positive, suggesting that bearish momentum may be waning and buying interest is building, albeit still constrained [1].
Geopolitical factors continue to influence gold prices, with ongoing tensions in the Middle East keeping rallies subdued. However, recent comments from Iran’s Foreign Ministry representative Esmaeil Baghaei, indicating efforts to de-escalate the conflict, have provided some optimism and supported risk appetite, which in turn pressured the US Dollar and contributed to the pullback in oil prices—developments seen as positive for gold [1].
The US Dollar remains under pressure following softer-than-expected US inflation data released last week, leading investors to reduce expectations of further Federal Reserve monetary tightening in the near term [1]. For gold bulls, a break above the triangle's top at around $4,050 would signal a potential trend shift, with upside targets at $4,100 (July 14 high) and $4,210 (July 6 high). Conversely, a break below the year-to-date low at $3,941 could expose the October 2025 low at $3,886, with the 127.2% Fibonacci extension of the late-June downleg at $3,830 as the next target [1].
CONCLUSION
Gold prices are currently consolidating within a technical triangle, supported by easing geopolitical tensions and a softer US Dollar. While bullish signals are emerging, a decisive breakout above $4,050 is needed to confirm a trend reversal. Market participants remain cautious, watching for further developments in both geopolitical and macroeconomic factors.