2026-08-17 · foreign-exchange

German bund yields hold flat near multi-day highs as rate hike fears recede

Gold Forecast and News

Gold (XAU/USD) builds on Friday's bounce from the $4,300 neighborhood, or a one-week low, and gains some follow-through positive traction at the start of a new week. The commodity, however, struggles to capitalize on the momentum beyond the $4,400 mark and remains below its highest level since June 5, touched on Friday, amid mixed fundamental cues.

Technical Analysis

From a technical perspective, the recent repeated failures to find acceptance above the $4,400 mark, or the 50% retracement level of the April-June decline, warrant some caution for XAU/USD bulls. Moreover, the precious metal remains below the 200-day Simple Moving Average (SMA), keeping the broader tone capped despite the recent recovery.

Meanwhile, the Relative Strength Index (RSI) at 64.43 leans toward bullish momentum, while the Moving Average Convergence Divergence (MACD) stays in positive territory. Improving momentum indicators, however, only hint that buyers are attempting a rebound within a still bearish, resistance-heavy backdrop.

Nevertheless, sustained strength and acceptance above the $4,400 mark (50% retracement level) should allow the Gold price to test the 200-day SMA near $4,506 and the 61.8% Fibonacci retracement at $4,509. Further barriers are seen at the 78.6% Fibo level at $4,666 and the cycle high zone at $4,865.

On the downside, initial support emerges at the 38.2% Fibo. retracement at $4,290, ahead of the 23.6% level at $4,154, while a deeper slide would expose the structural floor around the Fibonacci anchor near $3,935.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

Fundamental Analysis

Data released on Friday showed that US Retail Sales dropped 0.6% in July, marking the first fall in nine months and the biggest monthly decline since May last year. Adding to this, the University of Michigan's Consumer Sentiment Index dipped in August to 51 from 55.2 in the previous month. This comes on top of signs of cooling US inflation and further tempers expectations for an immediate interest rate hike by the Federal Reserve (Fed), which continues to undermine the US Dollar (USD) and lends support to the non-yielding bullion.

Investors, however, remain worried that volatile energy prices could complicate the inflation outlook and force the Fed to stick to a hawkish stance. Moreover, persistent geopolitical uncertainties help limit deeper losses for the safe-haven USD, capping the upside for the Gold price. Treasury Secretary Scott Bessent said that the US is preparing to hit Iran with economic measures that have never been seen, as soon as this week. This, along with the US-Iran standoff, keeps the geopolitical risk premium in play and should support the buck.

In other developments, President Donald Trump said that he would soon declare the Strait of Hormuz a "territory of the United States." Meanwhile, Iran's Foreign Minister Abbas Araghchi said that the US must agree to Tehran's conditions in order for shipping to resume through the waterway and that there were no negotiations currently taking place. Apart from this, fresh Ukrainian attacks on Russian refineries remain supportive of higher oil prices, keeping inflation fears and bets for at least one Fed rate hike in 2026 on the table.

According to CME Group's FedWatch Tool, traders are still pricing in around a 65% chance that the US central bank will raise borrowing costs by the end of this year. This, in turn, warrants some caution for USD bears and before positioning for any further appreciating move in the Gold price as traders await further cues about the Fed's future policy path. Hence, the focus will remain glued to the release of FOMC Minutes on Wednesday. Apart from this, the incoming geopolitical headlines might influence the USD and the precious metal.

XAU/USD daily chart

XAU/USD Forecast Poll

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Gold (XAU/USD)

In the Forex market, Gold functions as a currency. The particularity of Gold is that it is traded against the United States Dollar (USD), with the internationally accepted code for gold being XAU.

Known as a safe-haven asset, Gold is expected to appreciate in periods of market volatility and economic uncertainty. 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.

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. The United States is the country that holds the biggest resources of Gold in the world.

The XAU/USD pair tells the trader how many US Dollars are needed to purchase one troy ounce of Gold.

The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold prices escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher borrowing costs usually weigh on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars. A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.

Organizations that influence XAU/USD

People that influence XAU/USD

Circumstances that influence XAU/USD

The main variables traders should monitor to understand Gold's position are:

Assets that influence XAU/USD

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