Last Updated on 13/08/2026
- Gold fails to hold gains after climbing to its highest level since June 5 during the Asian session.
- Persistent inflation concerns linked to volatile oil prices continue to support expectations of further Fed rate hikes.
- Escalating geopolitical tensions boost demand for the US dollar, adding pressure on gold and triggering an intraday retreat.
Gold (XAU/USD) gave back its earlier gains on Thursday, retreating from an intraday high near $4,450—the strongest level since June 5 reached during the Asian session—and falling back below the $4,400 mark. Initial support from softer US inflation data faded as investors refocused on the risk that rising energy prices could reignite inflation, reinforcing expectations that the Federal Reserve may still need to tighten policy further. The prospect of higher interest rates prompted some profit-taking in the non-yielding precious metal.
Data released on Wednesday showed US inflation cooled in July, with headline Consumer Price Index (CPI) growth easing to 3.4% year-over-year from 3.5%, in line with forecasts. Core CPI, which excludes food and energy, also met expectations, rising 0.2% on the month and 2.5% annually. Combined with last week’s weaker-than-expected Nonfarm Payrolls report, the figures strengthened the case for the Fed to keep rates unchanged in September, offering temporary support to gold prices.
However, concerns over future inflation remain elevated due to ongoing volatility in energy markets. Tensions between the United States and Iran continue to threaten oil supplies, with Washington and Tehran maintaining opposing positions over the Strait of Hormuz. At the same time, Iran-backed Houthi forces have intensified attacks on shipping routes in the Red Sea and Bab el-Mandeb Strait, increasing geopolitical risks and helping sustain higher crude oil prices.
The resulting inflation concerns have kept expectations for additional Fed tightening alive. Market pricing continues to suggest a strong likelihood of at least one further rate increase in 2026. These expectations have supported a rebound in the US dollar from post-CPI lows, creating headwinds for gold and contributing to Thursday’s pullback. Even so, analysts note that a sustained move below $4,400 would be needed to confirm a deeper corrective decline.
Attention now turns to upcoming US economic data, including the Producer Price Index (PPI) and weekly Initial Jobless Claims figures. Comments from Federal Open Market Committee (FOMC) officials will also be closely monitored for clues on the future path of monetary policy. Meanwhile, developments in the Middle East are likely to remain a key driver of market sentiment and short-term volatility in gold prices.
Technical Analysis
Gold remains biased to the upside after closing above the 100-day Simple Moving Average (SMA) and breaking through the 50% Fibonacci retracement of the April–June decline. Bullish momentum is further supported by an elevated Moving Average Convergence Divergence (MACD) indicator, signaling that buyers continue to maintain control. Meanwhile, the Relative Strength Index (RSI) stands at 67.44, just below overbought territory, suggesting the rally remains intact although momentum may be approaching stretched levels.
A sustained move above the recent swing high could open the door for a test of the 200-day SMA near $4,502. Beyond that, resistance is located at the 61.8% Fibonacci retracement level of $4,525.18. A decisive break above this zone may pave the way for further gains toward $4,683, followed by the next major upside target around $4,885.
On the downside, initial support is seen at the 100-day SMA near $4,387. Additional support levels are positioned at the 38.2% Fibonacci retracement around $4,302 and the 23.6% retracement at $4,164.38. Should selling pressure intensify, a more substantial support base emerges near $3,941.47.
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