Will gold price hold $4,000 support as Brent crude oil above $90 boosts inflation?

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Gold slips 0.05% today near $4,014

Highlights

Rising Middle East tensions and surging Brent crude prices above $90 support increased safe-haven demand for gold.
Hawkish comments from U.S. Fed officials raise uncertainty, putting potential pressure on gold as a non-yielding asset.
Technicals indicate strong short-term bullish momentum with gold expected to trade sideways between $3,983 and $4,044, and high probability of an upside move.

Safe-haven flows and Fed signals shape gold sentiment amid inflation

Escalating Middle East tensions have increased safe-haven demand for gold, shaping market sentiment through its traditional role as a risk hedge. Brent crude oil's move above $90 a barrel raises inflation expectations, indirectly affecting gold demand by altering investor behavior during periods of rising input costs. Meanwhile, comments from several U.S. Federal Reserve officials about the potential need for interest rate hikes, as reported by Economictimes Indiatimes, introduce further uncertainty and may weigh on non-yielding assets like gold.

Upside signals persist as overbought risk grows near key support

Technical levels show that gold is trading above the MA-20 and MA-50 on the H1 timeframe, yet well below the MA-200 on the daily chart, while the Ichimoku Kijun sits at $4,000 as immediate support. The MACD currently signals a buy, with the ADX reading neutral, and the Awesome Oscillator suggesting upside potential. RSI stands at 61.48, indicating a buyer-biased position, while the Stochastic RSI, CCI, and Bull/Bear Power all point to overbought conditions. With the price trading near the mid-point of today’s range and volatility low, the market may be vulnerable to a short-term corrective move if buying continues unchecked.

Bullish outlook prevails unless resistance or support levels break

In the near term, the expected trading range is likely to fall between $3,983 and $4,044, reflecting the typical volatility band relative to current levels. The probability of a further upward move is estimated at 73%, with bullish momentum favored over immediate downside risk. The baseline expectation is for gold to remain within a sideways corridor unless there is a decisive breakout above resistance at $4,044. If the price breaks below support at $4,000, a pullback toward the lower end of the range would become more probable.

Anton Kharitonov, analyst at Traders Union, sees gold trading in a technically vulnerable zone despite modest bullish sentiment. Escalating geopolitical tensions are driving demand, but risk of a corrective pullback remains if bullish momentum overheats. He highlights overbought technical readings and warns against chasing the move. "Until gold decisively breaks above $4,044, I remain cautious and expect sideways action within the current range."

Earlier, analysts noted that gold’s price action tends to be driven by shifts in investor sentiment and external market forces, especially given its status as a non-yielding safe-haven asset. In light of ongoing geopolitical tensions and hawkish central bank commentary, traders should closely monitor for a decisive move above $4,044 as a potential catalyst for renewed bullish momentum beyond the current consolidation range.

Source of Data: XAU Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

The information is based on forecasts and does not constitute investment advice or a guarantee of future results. Market conditions may change. See our Disclaimer and Editorial Integrity for details.