Gold retreated sharply from a fresh 15-week peak of $4,697 during Asian trading on Tuesday, snapping a two-day winning streak. The pullback, which has erased nearly $70 from the session high, was driven by a resurgent US dollar and renewed geopolitical tensions that boosted oil prices and Treasury yields.
Geopolitical tensions and a stronger dollar cap gold
The US dollar held onto recent recovery gains, limiting further upside in bullion. A risk-off mood prevailed early Tuesday, fuelled by a decline in technology stocks, fresh US sanctions on Iran, and a subsequent rise in oil prices. US Treasury Secretary Scott Bessent described the measures as an “economic onslaught” against Iran’s global financial connections. In response, Iranian Economy Minister Ali Madanizadeh warned that Tehran had “our own tools” and that “the enemies should wait for an attack.”
Rising oil prices revived inflation fears and reinforced the dollar’s safe-haven appeal, while also pushing US Treasury bond yields higher. Because gold pays no interest, higher yields and a stronger dollar typically weigh on the non-yielding metal.
Technical outlook remains constructive
Despite the intraday drop, the daily chart for XAU/USD continues to show a bullish bias. Spot gold was trading near $4,636 and remained above all key moving averages. The 200-day simple moving average (SMA) around $4,520 has been reclaimed, a level that analysts at Societe Generale describe as a sign of “resurgence of upward momentum.” The 21-day SMA sits near $4,323 and the 100-day SMA near $4,379, both providing underlying support.
The 14-day Relative Strength Index (RSI) is at roughly 71, placing it in overbought territory. That suggests the uptrend remains firm but leaves the metal vulnerable to short-term corrective moves. Societe Generale analysts note that gold “broke out of a small base formation earlier this month” and, after reclaiming the 200-DMA, the next potential hurdles are $4,730 and $4,770 before the April peak at $4,890.
Key levels to watch
On the downside, initial support is at the 200-day SMA near $4,520. A deeper pullback could test the 21-day and 100-day SMA band between $4,323 and $4,379. If selling pressure intensifies, the 50-day SMA around $4,185 would be the next line of defence for the medium-term uptrend.
Several factors may limit further downside. Reduced expectations of a US Federal Reserve interest rate hike in September, combined with robust physical demand from India and China, could attract buyers on dips. The relatively light US economic calendar this week also leaves technical levels in focus.
Key takeaways
- Gold fell nearly $70 from a 15-week high of $4,697 as the US dollar strengthened on geopolitical risks and rising oil prices.
- The daily technical setup remains bullish: price holds above all key moving averages, and the 200-DMA has been reclaimed.
- The 14-day RSI at 71 signals overbought conditions, leaving gold susceptible to further short-term pullbacks.
- Analysts see next resistance at $4,730–$4,770, with support at the 200-DMA ($4,520) and the 21/100-DMA band ($4,323–$4,379).
Common questions
Why did gold pull back if the trend is still bullish?
Gold’s pullback was driven by a stronger US dollar and higher Treasury yields, which followed rising oil prices and geopolitical tensions. Such short-term corrections are common within an uptrend, and technical indicators still favour buyers overall.
What are the key support and resistance levels for gold?
Immediate support is at the 200-day SMA near $4,520, followed by the 21-day SMA at $4,323 and the 100-day SMA at $4,379. On the upside, resistance is seen at $4,730 and $4,770, with the April peak at $4,890 as a longer-term target.
For the latest price movements, check the live gold price.