Gold prices fell below $5,150 an ounce on Thursday, marking a second consecutive session of decline. Pressure on the market has intensified amid a sharp rise in oil prices, which increases inflation risks and reduces the likelihood of imminent interest rate cuts by central banks.
Oil has risen for the second day in a row. The market remains concerned about the prospect of a protracted conflict involving Iran, and these concerns outweigh the effect of a coordinated release of strategic oil reserves by major economies.
Despite the decision of the International Energy Agency to carry out the largest release in history (400 million barrels), investors considered that the measure was insufficient to stabilize the market.
The strengthening US dollar and rising Treasury yields have added more pressure on gold. Higher inflation expectations have decreased the likelihood that the Federal Reserve will ease monetary policy, and the market is now pricing in just one rate cut before the end of the year.
Data released yesterday showed that core inflation in the United States remains subdued at the start of the year. Meanwhile, the European Union has warned that inflation in the region could exceed 3% in 2026.
Technical analysis
On the H4 XAU/USD chart, the market is forming a consolidation range around the $5,196 level. A break down would open possibilities for a continuation of the correction towards $4,953. On the contrary, a bullish breakout would suggest the development of a wave of growth towards the level of $5,390. The MACD indicator confirms the current momentum, with its signal line above zero and pointing upwards.
On the H1 chart, the market broke through the $5,135 level and completed a wave of growth to $5,233, before pulling back to $5,140. Looking ahead, the probability of a new wave of growth developing towards the level of $5,262 will be considered. The stochastic oscillator supports this scenario, as its signal line remains above the 50 level and retains bullish potential towards the 80 level.
Conclusion
Gold faces growing headwinds as rising oil prices, driven by geopolitical tensions in the Middle East, reinforce concerns about inflation and further push away expectations of rate cuts from central banks. The strong dollar and rising yields compound the pressure on the unprofitable asset. While technical indicators suggest the possibility of a near-term rebound, the broader outlook remains cautious as markets digest the implications of sustained energy price inflation and its impact on monetary policy trajectories.
By RoboForex Analysis Department
Disclaimer:
Any forecast contained herein is based on the author's personal opinion. This analysis cannot be considered trading advice. RoboForex assumes no responsibility for trading results based on the trading recommendations and reviews contained herein.
