On Thursday, both gold (XAU/USD) and the British Pound (GBP/USD) experienced notable market movements amid fluctuating sentiment regarding a potential US-Iran deal and mixed economic data releases. Gold prices remained range-bound, trading at $4,532, with upside attempts capped below $4,580 and support holding above the $4,455 area. The market's cautious tone was influenced by US President Trump's comments that the US is in the final stage of talks with Iran, which lifted sentiment and kept US Dollar bulls in check, despite the military option remaining open. This optimism offset hawkish Federal Reserve minutes that suggested a rate hike is possible, resulting in only moderate market relief [1].
Meanwhile, the British Pound declined by 0.13% to near 1.3415 against the US Dollar during the European session. The GBP/USD pair faced selling pressure as optimism over a US-Iran deal faded following comments from Iran’s Supreme Leader, who insisted that near-weapons-grade uranium must remain in Iran, contradicting Washington’s demand for its surrender. This dampened market sentiment and contributed to the Pound's weakness [2].
The US Dollar Index (DXY) reflected these shifts, pulling back after Trump's initial comments but rebounding swiftly to near 99.30 as optimism faded. The DXY was strongest against the Australian Dollar, up 0.35%, and showed smaller gains against other major currencies, including a 0.05% rise against the British Pound [2].
Additionally, weak UK economic data added to the Pound's decline. The preliminary UK S&P Global Composite PMI for May fell to 48.5, indicating a contraction in business activity, contrary to expectations of an expansion to 51.7 from April’s 52.6. This surprise contraction in the service sector further pressured the GBP/USD pair [2].
Technical analysis for gold indicates mixed momentum, with the RSI just below neutral and the MACD turning positive, suggesting fading downside momentum but not enough to reverse the broader bearish bias. Key resistance levels for gold are noted at $4,580 and $4,650, with support at $4,455 and $4,350 [1].
CONCLUSION
Market sentiment remains cautious as hopes for a US-Iran deal fluctuate and economic data delivers mixed signals. Gold is trading in a tight range with limited momentum, while the British Pound is under pressure from both geopolitical uncertainty and disappointing UK PMI data. Investors are likely to remain attentive to further developments in US-Iran negotiations and upcoming economic releases.