Gold Price Forecast: XAU/USD bulls will find resistance at the $4,850 area
Gold appreciates for the second consecutive day, reaching levels close to $4,800.Hopes of a new round of negotiations between IS and Iran are weighing on the safe-haven USD.XAU/USD's recovery from 2026 lows near $4,100 has stalled below the $4,850 area.Gold (XAU/USD) is showing a moderate bullish tone for the second consecutive day on Tuesday, with price action approaching the $4,800 level after bouncing from one-week lows at $4,664 on Monday. Speculation about a new round of negotiations between the US and Iran is allowing a moderate risk aversion, which is buoying precious metals against the safe-haven US Dollar.
News reports hint at ongoing contacts between the US and Iran. Reuters affirmed earlier on Tuesday that delegations from both countries might be ready to resume peace negotiations in Pakistan this week, while US President Donald Trump assured on Monday that Iran had called asking to “work for a deal”. On Tuesday, US Vice President JD Vance said that it is up to Tehran to “take the next step·” in peace negotiations.
From a wider perspective, XAU/USD continues trading within a horizontal range with resistance at the $4,850 area holding bulls, with downside attempts limited by the 38.6% Fiboonacci retrecement of the March sell-off, around $4,620
Relative Strength Index (RSI) in the 4-hour chart has popped up above the 50 midline, but remains capped below 60. The Moving Average Convergence Divergence (MACD) keeps hovering around the zero line, showing a lack of clear momentum.
Bulls should break the mentioned $4,850 resistance area (April 8 high) to resume the near-term bullish trend towards the 61.8 Fibonacci level, at $4,932, and a previous support turned resistance right above $5,000.
On the downside, a slide back through the $4,620 area would negate the bullish structure and expose March 26 lows at the $4,350 area.
(The technical analysis of this story was written with the help of an AI tool.)
Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Who buys the most Gold?Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
How is Gold correlated with other assets?Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
What does the price of Gold depend on?The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.