Gold price remains trapped within a range

Gold started the new trading week on a mixed note. The metal edged slightly higher during the early Asian session on Monday amid hopes of easing U.S.-Iran tensions. This rise followed news that Iran made a fresh offer to the U.S. to reopen the Strait of Hormuz and resolve the crisis, easing investor concerns about escalating conflict in the Middle East. Additionally, a weaker U.S. dollar has made greenback-denominated commodities more affordable for holders of other currencies.

However, after a moderate bounce in the Asian session, gold prices have traded flat. Given the lack of major economic events on Monday’s calendar, the session remained quiet despite ongoing geopolitical tensions. As of this writing, the precious metal retreated to $4,700. Starting Tuesday, significant economic data releases and central bank meetings are expected to increase market volatility.

Focus on Fed Chair Powell’s Speech

The key event for XAU/USD this week is the U.S. Federal Reserve’s interest rate decision and Fed Chair Jerome Powell’s monetary policy speech. The Fed is widely expected to hold rates steady amid uncertainty stemming from the Iran conflict.

Investors are eagerly awaiting Fed Chair Powell’s comments and the updated dot plot for insights into the Federal Reserve’s future policy direction, as inflation concerns once again dominate the narrative. With Powell’s term ending on May 15, this will be his final Fed meeting. He is scheduled to hold a press conference 30 minutes after the decision, where market participants hope to gain clarity on the Fed’s approach to current challenges. The Fed’s interest rate stance and forward guidance could significantly impact precious metals.

XAUUSD Technical Outlook

Technically, it is too early to conclude that the recent upward correction in gold prices is over, but signs of short-term sideways consolidation are emerging. Gold has maintained a consolidative range for the third consecutive day. Key support is identified near $4,640–$4,630, while resistance lies around $4,790/4,800.

Conclusion

This week, Fed Chair Powell's comments will likely drive gold prices. Investor sentiment and market dynamics will also be affected by Middle East tensions this week. Market volatility and big moves are expected. Manage risk and trade wisely.

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