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Gold Price Forecast: XAU/USD recovery stalls below $4,540 amid cautious markets
- Gold bounces up above $4,500 but remains capped below $4,540.
- News of a ceasefire in Lebanon has improved market sentiment and is weighing on the USD.
- XAU/USD remains trading within a range, with key resistance at $4,590.
Gold (XAU/USD) bounces up on Tuesday, retracing Monday’s losses and returning to levels beyond $4,500. The precious metal has drawn some support from a ceasefire in Lebanon, although price action remains trapped within previous ranges, with investors awaiting developments from Iran’s war.
Israel and Hezbollah have agreed a partial ceasefire, and US President Donald Trump said that Israel’s Prime Minister Benjamin Netanyahu has frozen his plans to attack Beirut. Investors remain hopeful that a durable peace in the area is still possible, which is keeping the US Dollar Index (DXY) on the back foot on Tuesday, although risk appetite remains subdued, with the US-Iran peace talks stalled and the Strait of Hormuz closed, with no plan to reopen it on sight.
On the macroeconomic front, US manufacturing data revealed healthy business activity in May, and the focus now shifts to the US JOLTS Job Openings. These figures will frame a string of labour releases this week, ending with the key Nonfarm Payrolls report, which is expected to shed some more light on the US Federal Reserve’s (Fed) monetary policy plans.
Technical Analysis: Rangebound consolidation continues
XAU/USD trades at $4,530 after failing to extend gains beyond $4,540 earlier on the day, which leaves price action trapped within recent ranges. The 4-hour Relative Strength Index (RSI) near 55 suggests bullish momentum, with the positive Moving Average Convergence Divergence (MACD) hinting that downside pressure has eased even if bulls lack clear control.
Key resistance remains at $4,590, which has held bulls several times in the second half of May. A break above that zone would expose the confluence of the mid-May lows and the top of the bearish channel from April, at the $4,645 area
Immediate support is seen at Monday’s low near $4,445, with additional protection at May’s bottom, in the area of $4,370. The base of the bearish channel is now around $4,340.
