Gold Weekly Forecast: XAU/USD Near $5,000 as Iran Risks and Fed Bets Collide
Gold closed Friday at $4,985, after another week of upward progress driven more by international politics than technical indicators...
Quick overview
- Gold closed at $4,985, driven by international political tensions, particularly regarding Iran.
- Expectations of no near-term interest rate hikes from the Federal Reserve have supported gold's price.
- Technical indicators suggest gold is gaining momentum, with a new support level established around $4,970.
- Investors should monitor the Fed's upcoming meeting and any developments in Iran for potential market impacts.
Gold closed Friday at $4,985, after another week of upward progress driven more by international politics than technical indicators. Comments from US President Donald Trump hinting at sending US naval ships to Iran, reignited concerns about potential war in the Middle East, and in doing so, got investors taking a defensive strategy.
Gold historically reacts pretty quickly to rising uncertainty and to military threats when investors are already feeling skittish about the overall state of the economy. With Iran still the biggest uncertainty in that part of the world, you can expect traders to be more cautious with their positions and more likely to hold onto protection rather than taking on risks.
Fed Expectations Keep the Dollar Under a Weight
Gold’s price has also been supported by expectations that interest rates will not rise in the near term. While the Federal Reserve hasn’t made it official yet, futures markets are still pricing in a couple of interest rate cuts in 2026, which has taken some of the pressure off the dollar. Right now, the US Dollar Index is hovering just above 97.60, which is near the highs we saw a while back.
When the dollar is weaker, it makes gold more attractive to investors globally, and it also means that holding onto other assets that don’t give you interest like gold doesn’t cost as much. With the next FOMC meeting kicking off on Tuesday, any sign that the Fed is even thinking about changing course could give gold another boost.
Gold (XAU/USD) Technicals Suggest Another Upward Move
In terms of the charts, gold is heading into the next week with some serious momentum behind it. The price is supported by a rising trendline, and we’ve seen higher lows since the bounce from the $4,900 area. The way the latest candlesticks have printed, we’re looking at a consolidation rather than the market finally running out of steam.
What’s interesting is that the old resistance level around $4,970 has flipped and is now our new first line of support. Below that, we have a bit more demand at $4,910 and then $4,880. If we are looking at the RSI (Relative Strength Index), it’s in the mid 60s – that’s not a sign of a reversal, more that the market is just taking a breather.
If gold starts the week above $4,960, the odds are still in our favour of another move up the charts, with our first target at $5,010 and then the $5,050 area.
Stuff to Keep an Eye On Next Week
- Watch to see what the Fed has to say and whether they seem open to changing course
- See how the dollar reacts when it gets near 97 and 98.
- Any big news coming out of Iran is going to be worth keeping an eye on
Trade idea: If the market does pull back, buy near $4,970, target $5,050 & stop just below $4,910.
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