Gold price (XAU/USD) increased by 1.5% to trade near $4,067 during the European session on Tuesday, outperforming as oil prices stalled and investors grew more confident about resumed peace negotiations between the United States and Iran [1]. WTI Oil initially hit a fresh monthly high at $84.42 but corrected sharply, settling near $82.65. The decline in oil prices has eased inflation expectations and reduced fears of further interest rate hikes from central banks, which is seen as a positive scenario for non-yielding assets like gold [1].
Additionally, a slight correction in the US Dollar, with the Dollar Index (DXY) trading 0.1% lower near 100.90, has supported gold prices. A weaker US Dollar typically makes gold more attractive as a risk-reward bet for investors [1]. On the monetary policy front, the Federal Reserve is almost certain to keep interest rates unchanged at its policy meeting next week [1].
From a technical perspective, XAU/USD is trading higher at around $4,069.52, close to the 20-day Exponential Moving Average (EMA) at $4,089.31, and is attempting a breakout from a Descending Triangle formation after a month of sideways movement. However, momentum remains subdued, with the 14-period Relative Strength Index (RSI) hovering around 45, indicating a lack of strong bullish conviction [1]. Immediate support is seen at $4,043, with further support at the rising trend-line floor at $3,941.63. On the upside, reclaiming the 20-period EMA at $4,089.31 could open the way for a recovery toward the July 6 high near $4,200 [1].
CONCLUSION
Gold prices have risen amid easing inflation fears and a weaker US Dollar, with technical indicators suggesting a potential breakout but subdued momentum. The market is watching for confirmation above key resistance levels, while the Federal Reserve is expected to keep rates unchanged next week. Overall, gold remains supported by macroeconomic factors and technical positioning.