Gold rebounds from a monthly low as the US dollar stabilizes after its post-Fed rally, with ongoing US–Iran tensions in the background.

Gold draws some buying interest on Thursday as the US dollar pauses following its post-FOMC rally. Meanwhile, elevated crude oil prices continue to stoke inflation concerns and reinforce expectations of a more hawkish Federal Reserve. At the same time, the ongoing US–Iran standoff underpins the dollar, which in turn caps further upside for the metal.

Gold (XAU/USD) extends its modest rebound from the $4,500 area—its latest monthly low—and gains traction during Thursday’s Asian session. The US dollar is currently consolidating after a hawkish Fed-driven rally to a two-and-a-half-week high, providing a supportive backdrop for the metal.

As expected, the Federal Reserve left interest rates unchanged at 3.50%–3.75%, though the decision saw the most dissent since 1992, with three officials opposing the policy tone. Fed Chair Jerome Powell later emphasized that the disagreement centered on communication rather than the need for rate hikes. Still, markets scaled back expectations for policy easing in 2026 and are now assigning a modest probability to a rate increase by year-end.

At the same time, surging energy prices—driven by ongoing US–Iran tensions and stalled negotiations—are reinforcing inflation concerns and supporting the dollar. In a recent development, President Donald Trump dismissed Iran’s proposal to end the conflict, insisting that no agreement would be reached unless Tehran abandons its nuclear ambitions. He also highlighted that naval blockades are continuing to disrupt energy flows through the Strait of Hormuz.

These factors may help sustain the dollar’s strength and limit gold’s upside potential. Even so, the precious metal has broken a three-day losing streak and is trading near $4,580, up about 0.75% on the day. Market participants now turn their attention to key US data releases, including the advance Q1 GDP report and the PCE Price Index, along with upcoming policy decisions from the Bank of England and the European Central Bank, which could drive further volatility.

Gold chart

Gold could face renewed selling pressure at higher levels, given the weakening technical outlook.

The recent rejection near the 200-period Simple Moving Average (SMA) on the 4-hour chart, combined with a drop below the 38.2% Fibonacci retracement of the March–April rally, tilts the bias in favor of XAU/USD bears.

Momentum signals also remain fragile, with the Relative Strength Index (RSI) lingering around 38 and the Moving Average Convergence Divergence (MACD) still in negative territory. This indicates that any recovery attempts may struggle as long as prices remain capped below key resistance levels.

On the downside, initial support is located near the 50% retracement around $4,494.59, followed by deeper Fibonacci support levels at $4,401.36 and $4,268.64, which could act as a broader cushion if selling pressure intensifies.