Gold (XAU/USD) fell more than 1% on Wednesday, reaching its lowest level since March 30 at $4,443, as the US Dollar strengthened amid revived doubts over a potential US-Iran deal. The US Dollar Index (DXY) rose 0.06% to 99.20, providing a headwind for gold prices [1]. US President Donald Trump stated that there would be no sanctions relief for Iran unless it agreed to give up uranium, and the White House denied reports from Iran's state TV about a draft deal, fueling uncertainty and supporting the Greenback [1].
Similarly, AUD/USD declined nearly 0.44% to around 0.7136, pressured by softer-than-expected Australian inflation data and ongoing uncertainty regarding US-Iran negotiations, which kept the US Dollar supported [2]. Australia's Consumer Price Index (CPI) eased to 4.2% year-over-year in April from 4.6% in March, missing expectations of 4.4%, while the Reserve Bank of Australia's Trimmed Mean CPI rose to 3.4%, in line with forecasts [2]. The weaker inflation data, combined with recent soft labor market figures, led traders to scale back expectations for near-term RBA rate hikes, reinforcing the likelihood of a prolonged pause in the central bank's tightening cycle [2].
Technical analysis for gold suggests further downside risk, with the first support at $4,400 and a potential move toward the March 23 cycle low of $4,098 if that level is breached. Resistance levels are noted at $4,500, $4,550, and $4,600, with the 50-day Simple Moving Average at $4,636 as a key hurdle [1]. For AUD/USD, the pair remains below the 20-day Bollinger SMA at 0.7187, with immediate support at the lower Bollinger band around 0.7100 and broader trend support at the 100-day moving average near 0.7038 [2].
Market sentiment remains cautious, with investors pricing in a nearly 50% chance that the Federal Reserve, now led by Kevin Warsh, will hike rates toward the end of the year, according to Prime Terminal data [1]. The US economic calendar this week includes Durable Goods Orders, jobs data, GDP figures, and the Fed’s preferred inflation indicator, the Core PCE Price Index [1].
Both articles highlight that mixed signals and denials regarding a US-Iran deal have contributed to a firmer US Dollar, pressuring both gold and the Australian Dollar. According to [1], the US administration's tough stance on Iran and hawkish central bank signals have weighed on gold, while [2] notes that the uncertainty has kept the US Dollar supported and limited downside for the currency.
CONCLUSION
Doubts over a US-Iran deal and a stronger US Dollar have driven gold to two-month lows and pressured the Australian Dollar. Softer Australian inflation data and cautious central bank outlooks further weighed on AUD/USD. Market sentiment remains cautious, with attention on upcoming US economic data and central bank actions.