Gold (XAU/USD) is attempting to recover from its lowest level in nearly six weeks, but the rebound remains limited. During Thursday’s Asian session, September 17, buyers returned to the market, although the precious metal struggled to break decisively above the $4,300 level.
The recovery remains constrained by a stronger US Dollar, which has extended its gains following the Federal Reserve’s latest policy decision. The Dollar climbed to its highest level since late July as markets digested the Fed’s more hawkish outlook.
At the same time, renewed tensions in the Middle East are boosting demand for the US Dollar as a safe-haven asset. This combination of higher US yields and a firmer Dollar continues to create a challenging environment for gold, which typically faces pressure when the greenback and Treasury yields rise.
Technical Analysis
From a technical perspective, the short-term outlook for XAU/USD remains bearish while prices stay below the $4,315-$4,320 area.
This zone represents an important technical barrier, combining the 50% Fibonacci retracement of the June-August advance with the 100-day Simple Moving Average (SMA).
A sustained break above this resistance could improve the technical picture and open the way toward the $4,404 area, corresponding to the 38.2% Fibonacci retracement. Further gains could expose the $4,513 level, near the 23.6% retracement, before the broader cycle high around $4,690 comes into focus.
On the downside, the first important support is located around the $4,226 level, marked by the 61.8% Fibonacci retracement. If selling pressure intensifies, gold could retreat toward $4,100, corresponding to the 78.6% retracement.
A deeper decline could bring attention back to the previous structural low near $3,940.20.
Momentum indicators also continue to reflect the corrective phase. The MACD remains below its signal line and in negative territory, although the bearish histogram is contracting. Meanwhile, the RSI is around 44, suggesting that downside momentum may be losing some strength but has not yet produced a clear bullish reversal signal.
This development is important for gold traders and XAU/USD market participants because several major drivers are currently pulling the market in different directions. A stronger US Dollar, elevated Treasury yields and the Fed’s hawkish stance are creating bearish pressure, while geopolitical tensions could generate renewed safe-haven demand for gold.
With both monetary policy and geopolitical risks influencing the market, traders may want to closely monitor Fed expectations, US Treasury yields, Dollar strength and developments in the Middle East before positioning for the next major XAU/USD move.
