Gold (XAU/USD) was little changed on Thursday, with small losses inside the weekly range. Gains stayed capped below $4,580, while selling pressure was limited above $4,455.
The US Dollar Index eased on Wednesday after US President Donald Trump said talks with Iran were in their final stage. He also said a military option remains possible, while market reaction stayed moderate and risk mood improved.
Market Drivers And Fed Outlook
These comments offset Federal Reserve minutes that kept the chance of a rate rise on the table. Traders remained cautious after repeated shifts in headlines.
US Preliminary S&P Global PMIs due on Thursday are expected to show activity stayed buoyant in May despite Iran’s war. Manufacturing may show a mild slowdown, and the data could support the US dollar.
XAU/USD traded near $4,532, with mixed momentum signals. RSI was just below the midline, while MACD turned positive.
Resistance remained at $4,580, then $4,650, and May’s top near $4,770. Support was at $4,455, with a break pointing to $4,350.
Technical Levels And Strategy Considerations
The technical section was produced with help from an AI tool.
Looking back at the situation in May of 2025, we were dealing with conflicting signals from potential peace with Iran and a hawkish Federal Reserve. Since then, the landscape has shifted considerably, as the Fed did proceed with rate hikes through the end of last year. Those hikes have now put a ceiling on gold, even as the geopolitical situation has once again become tense.
The current environment is defined by stubborn inflation and a slowing economy, creating a difficult puzzle. Last month’s CPI print came in at a sticky 3.4%, giving the Fed reason to maintain its “higher for longer” interest rate policy. This continues to provide headwinds for non-yielding assets like gold.
However, we also saw first-quarter GDP growth slow to a weaker-than-expected 1.6%, signaling that the past rate hikes are beginning to bite. This economic cooling suggests the Fed’s next move will eventually be a rate cut, which is supportive for gold prices in the long run. This tug-of-war between persistent inflation and slowing growth is keeping gold pinned in a range.
Given this uncertainty, traders could consider options strategies that benefit from either a sudden breakout or continued range-bound price action. Buying long-dated call options allows for positioning for an eventual Fed pivot to rate cuts later this year without taking on immediate directional risk. Conversely, selling volatility through strategies like iron condors could be viable if gold remains stuck between strong economic crosscurrents.
The key technical levels from last year remain surprisingly relevant, with gold currently struggling to break above that same $4,580 resistance area. A decisive move above this level could signal that the market is beginning to price in future rate cuts more aggressively. Failure to break out would suggest more sideways consolidation, reinforcing the view that the Fed’s current stance is keeping a firm lid on the metal for now.
