Forex News
- Back-to-back doji candles reflect indecision near the key $81 resistance.
- Lower high and low pattern signals weakening bullish structure.
- Break below $76.94 exposes $73.36 and $70.00 support levels.
Silver (XAG/USD) loses 0.30% on Thursday, failing to clear a key resistance at $81.00 as the Greenback stages a comeback. At the time of writing, XAG/USD trades at $78.73 after hitting a daily high of $80.86.
XAG/USD Price Analysis: Technical Outlook
Silver registered a lower high and a lower low on Thursday, registering back-to-back doji candles, hinting at traders’ indecision of pushing prices higher. Momentum-wise, the Relative Strength Index (RSI) is bullish but has turned flat, an indication of consolidation.
For a bullish continuation, a decisive break above $81.00 is needed, allowing buyers to challenge the 2025 high at $83.75, followed by March’s 10-cycle high at $90.01. On further strength, bulls can test the March 2 peak at $96.39 ahead of the $100 mark.
On the other hand, if XAG/USD slides below the 100-day Simple Moving Average (SMA) of $76.94, expect a drop towards the 20-day SMA at $73.36, before the psychological $70.00 figure.
XAG/USD Price Chart – Daily
Silver FAQs
Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.
Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
BNY's Geoff Yu highlights that South Korea, Taiwan and Japan have become key surplus providers to the U.S. as China’s exports to America declined. The Bank of Korea (BoK) warns the current supply shock could be more severe than 2022–2023, implying a potential swing from sizeable surpluses to deficits and a sharp reduction in capital outflows that previously supported global markets.
BoK flags deeper surplus reversal
"The sharp drop in exports from China to the U.S. (unadjusted for trans-shipments) has increased the share of surpluses generated by Japan, South Korea and Taiwan for the U.S. Against all trading partners, they stood at a combined $40bn in January, with the rolling three-month average surplus also hitting $30bn."
"The risk is that all of this could now move sharply into reverse. At the recent Bank of Korea (BoK) meeting, Governor Rhee Chang-yong, whose term ends this week, warned that the current shock would be even more severe than in 2022–2023. If this scenario is realized, the capital flow swing due to surpluses shifting into trade deficits across APAC would be material."
"Taking Governor Rhee at his word, if the deficit for South Korea and its peers is even worse than 2022, a maximum swing from $40bn in combined surpluses to more than $30bn in combined deficits would represent a single-month drop of $70bn in capital outflows (assuming full recycling). On a three-month rolling basis, the combined swing could reach $150bn (from a $30bn positive three-month average to -$20bn). Considering that the combined surplus drop for China, Taiwan and South Korea for intervention purposes already exceeded $100bn in March alone, a $150bn loss in recycling flow is not unrealistic."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Here is what you need to know on Friday, April 17:
The US Dollar Index (DXY) is trading near the 98.20 price region on a firm footing amid a complex geopolitical backdrop. The Strait of Hormuz remains partially blocked, with reports of a “double blockage” disrupting flows even as some tankers manage to pass. Iran’s proposal to impose a toll payable via its domestic banking system adds a new layer of uncertainty to global trade and energy markets. Meanwhile, diplomatic clarity remains elusive, with talks between Washington and Tehran still unconfirmed, although the United States (US) President Donald Trump hinted that a meeting could take place over the weekend.
A tentative 10-day ceasefire between Israel and Lebanon is set to begin on Thursday at 5:00 pm EST, but its credibility is already being questioned. Israeli Prime Minister Benjamin Netanyahu announced that forces will remain in the South Lebanon buffer zone. Meanwhile, Hezbollah indicated that any ongoing Israeli presence would justify their resistance to it. The group also cautioned that the ceasefire should not allow Israel operational freedom within Lebanon, underscoring the fragility of the agreement and maintaining elevated geopolitical risks.
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.15% | 0.20% | 0.13% | -0.29% | 0.15% | 0.45% | 0.18% | |
| EUR | -0.15% | 0.05% | -0.02% | -0.42% | 0.00% | 0.27% | 0.03% | |
| GBP | -0.20% | -0.05% | -0.04% | -0.48% | -0.05% | 0.22% | -0.03% | |
| JPY | -0.13% | 0.02% | 0.04% | -0.43% | 0.04% | 0.27% | 0.05% | |
| CAD | 0.29% | 0.42% | 0.48% | 0.43% | 0.45% | 0.73% | 0.48% | |
| AUD | -0.15% | -0.01% | 0.05% | -0.04% | -0.45% | 0.26% | 0.05% | |
| NZD | -0.45% | -0.27% | -0.22% | -0.27% | -0.73% | -0.26% | -0.24% | |
| CHF | -0.18% | -0.03% | 0.03% | -0.05% | -0.48% | -0.05% | 0.24% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
EUR/USD is trading with a softer tone near the 1.1780 price region, standing down after eight straight days of gains as the US Dollar (USD) continues to draw support from safe-haven demand. Persistent geopolitical stress and uncertainty around energy flows keep downside pressure on the pair as traders remain cautious about the Eurozone’s exposure to external shocks.
GBP/USD is also under pressure, drifting lower near the 1.3530 level amid a stronger Greenback and a risk-averse market environment.
USD/JPY is edging higher near 159.10, supported by the firm USD and steady US yields. While the Japanese Yen retains some safe-haven appeal, it is being outpaced by the US Dollar’s strength, particularly as geopolitical tensions remain unresolved and energy risks linger.
AUD/USD is trading defensively near the 0.7160 price region, weighed down by deteriorating risk sentiment. The Australian Dollar (AUD), typically sensitive to global growth and commodity demand, remains on the back foot amid uncertainty over oil supply routes and Middle East developments, which clouds the outlook.
West Texas Intermediate (WTI) Oil is trading near $93.90 per barrel, firmer on the day as supply concerns stemming from the Hormuz disruption keep it afloat. The introduction of potential Iranian transit tolls and the lack of confirmed diplomatic progress continue to fuel upside risks, even as partial tanker movement prevents a full supply shock.
Gold (XAU/USD) is muted near $4,789 after benefiting from sustained safe-haven demand earlier in the day. Speculation about an ongoing ceasefire is deterring investors from safe havens.
What’s next in the docket:
Friday, April 17:
- US IMF Meeting
WTI Oil FAQs
WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media.
Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.
The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.
OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.
Danske Bank’s Danske Research Team observes that Chinese GDP and industrial production surprised to the upside, while retail sales remained weak and unemployment ticked higher. The bank notes that 5% GDP growth should reassure Beijing policymakers, who remain ready to add stimulus if the Iran war weighs more heavily, and that the data helped CNY strengthen slightly.
Solid growth and risk sentiment lift currency
"China released its monthly batch of data overnight, which continued to show a two-speed economy with weak consumer demand and strong exports/production. GDP increased 5.0% y/y in Q1 above expectations of 4.8% y/y, and industrial production beat expectations at 5.7% y/y (cons: 5.3% y/y) lifted by strong export growth."
"Retail sales for March disappointed growing only 1.7% y/y from an average of 2.8% y/y in the first two months of the year. The main good news came from house prices that fell -0.21% m/m, less than what we have seen lately, while the unemployment rate increased from 5.3% in February to 5.4% in March, the highest level since February last year. "
"The 5% GDP growth will give some comfort to policymakers in Beijing, but they will stand ready to provide economic stimulus over the coming quarters if the hit from the Iran war, to both exports and domestic demand, starts to get stronger. "
"The numbers added to the positive risk sentiment in Chinese stocks overnight and the CNY strengthened slightly."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Commerzbank’s Michael Pfister notes that G10 and Gelişen Piyasalar (EM) carry trades have delivered strong paper gains, helped by Iran-related market moves and high-yield currencies like the Brazilian Real and Mexican Peso. He stresses there is no empirical evidence of systematic long-term outperformance and warns that recent EM carry performance is heavily interest-income driven, with exchange rates still recovering from 2024 losses.
War effects lift carry performance
"Since the beginning of the year, however, these strategies have continued to deliver positive results on paper. A G10 strategy in particular has outperformed pure interest income. But this is not because the strategy itself is good."
"The carry trade strategy benefits during such times not only from interest income, but also from exchange rate movements favouring it. For G10 carry traders, the first quarter was therefore a very good one on paper. While I don't fundamentally reject this strategy, every market participant should bear in mind that there is no empirical evidence of systematic long-term outperformance."
"One more point: in recent years, EM carry trade strategies have also grown in popularity. Here, too, exchange rate movements played a major role, with many high-yield emerging market currencies performing exceptionally well last year (for example, the Brazilian real and the Mexican peso). The Bloomberg EM Carry Trade Index has accordingly also shown exceptionally strong performance since the beginning of 2025."
"But be cautious: this is largely due to interest income, and the exchange rate component is still trying to make up for its poor performance in 2024."
"Of course, this doesn't mean that the strategy never performs well in the short term when exchange rate movements support it for certain reasons, although it is questionable whether one wouldn't have been better off relying on other strategies during such phases."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- AUD/USD eases as USD stabilizes after recent weakness.
- Oil-driven inflation risks reduce the scope for near-term Fed rate cuts.
- Australian jobs data support hawkish RBA stance.
The Australian Dollar (AUD) trades under pressure against the US Dollar (USD) on Thursday, as the Greenback steadies after recent weakness, allowing AUD/USD to snap a three-day winning streak. At the time of writing, the pair is trading around 0.7155 after briefly approaching the 0.7200 level, last seen in June 2022, following the release of Australian employment data.
The US Dollar is stabilizing, with the US Dollar Index (DXY), which tracks the Greenback’s value against a basket of six major currencies, snapping an eight-day losing streak to trade near 98.20 after rebounding from an intraday low of 97.83, its lowest level since March 2.
The rebound comes as geopolitical headlines surrounding the US-Iran conflict keep markets on edge. Gulf and European officials see a US-Iran deal taking up to six months to finalize, according to a Bloomberg report.
They are also urging an extension of the current ceasefire over that period and calling for the immediate reopening of the Strait of Hormuz to restore energy flows, warning that prolonged disruption could risk triggering a global food crisis.
Meanwhile, US and Iranian negotiators have reportedly scaled back ambitions for a comprehensive peace agreement and are instead pursuing a temporary memorandum aimed at preventing a renewed escalation, two Iranian sources told Reuters.
Investors remain cautiously optimistic about a potential deal, with US President Donald Trump saying the next meeting with Iran could take place over the weekend and that he would consider extending the ceasefire if necessary, while also warning that “if there is no deal with Iran, fighting will resume.”
As uncertainty persists and supply disruptions through the Strait of Hormuz continue, Oil prices remain elevated despite easing from recent highs, keeping inflation risks in focus and reducing the scope for near-term Federal Reserve (Fed) rate cuts.
New York Fed President John Williams said the Middle East conflict is already lifting inflation, adding that policy is “well positioned” despite challenges. Williams expects inflation to rise to around 2.75%-3% this year.
In Australia, the latest employment data offered mixed signals but broadly supported a still-resilient labor market, reinforcing the Reserve Bank of Australia’s (RBA) hawkish stance.
The economy added 17.9K jobs in March, slightly below expectations of 20K and down from the previous 49.7K gain, while the unemployment rate held steady at 4.3% for a second consecutive month.
(This story was corrected on April 16 at 19:15 GMT to say that AUD/USD snaps a three-day winning streak, not a four-day streak.)
RBA FAQs
The Reserve Bank of Australia (RBA) sets interest rates and manages monetary policy for Australia. Decisions are made by a board of governors at 11 meetings a year and ad hoc emergency meetings as required. The RBA’s primary mandate is to maintain price stability, which means an inflation rate of 2-3%, but also “..to contribute to the stability of the currency, full employment, and the economic prosperity and welfare of the Australian people.” Its main tool for achieving this is by raising or lowering interest rates. Relatively high interest rates will strengthen the Australian Dollar (AUD) and vice versa. Other RBA tools include quantitative easing and tightening.
While inflation had always traditionally been thought of as a negative factor for currencies since it lowers the value of money in general, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Moderately higher inflation now tends to lead central banks to put up their interest rates, which in turn has the effect of attracting more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in the case of Australia is the Aussie Dollar.
Macroeconomic data gauges the health of an economy and can have an impact on the value of its currency. Investors prefer to invest their capital in economies that are safe and growing rather than precarious and shrinking. Greater capital inflows increase the aggregate demand and value of the domestic currency. Classic indicators, such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can influence AUD. A strong economy may encourage the Reserve Bank of Australia to put up interest rates, also supporting AUD.
Quantitative Easing (QE) is a tool used in extreme situations when lowering interest rates is not enough to restore the flow of credit in the economy. QE is the process by which the Reserve Bank of Australia (RBA) prints Australian Dollars (AUD) for the purpose of buying assets – usually government or corporate bonds – from financial institutions, thereby providing them with much-needed liquidity. QE usually results in a weaker AUD.
Quantitative tightening (QT) is the reverse of QE. It is undertaken after QE when an economic recovery is underway and inflation starts rising. Whilst in QE the Reserve Bank of Australia (RBA) purchases government and corporate bonds from financial institutions to provide them with liquidity, in QT the RBA stops buying more assets, and stops reinvesting the principal maturing on the bonds it already holds. It would be positive (or bullish) for the Australian Dollar.
- Gold edges lower as improving risk sentiment reduces haven demand.
- A firmer US Dollar and lower geopolitical anxiety pressured bullion prices.
- Markets now weigh softer conflict risks against the Fed’s policy outlook.
Gold (XAU/USD) price edges lower on Thursday during the American session as geopolitical tensions are tempered amid negotiations to resume US-Iran talks and a likely ceasefire between Israel and Lebanon, brokered by US President Donald Trump. At the time of writing, XAU/USD trades at $4,784, down 0.13%.
Bullion eases as truce hopes dent safe-haven appeal
The yellow metal is pressured by the US Dollar’s recovery, which is erasing some of its Wednesday losses, as shown by the US Dollar Index (DXY). The DXY, which measures the US Dollar’s value against six currencies, is up 0.21% at 98.25.
Speculation for a deal between Washington and Tehran was cheered by Wall Street, with its three largest indices posting gains. However, negotiations seem stuck as negotiators on both sides are eying a memorandum to prevent a resumption of the conflict.
Sources revealed that the US and Iran are narrowing some gaps, including the Strait of Hormuz. However, Tehran wants Washington to unfreeze Iranian funds in exchange for allowing ships to sail through the strait via Omani waters.
In the meantime, a Western diplomat said the nuclear issue “remains a core obstacle.”
US President Donald Trump announced Thursday that Israel and Lebanon agreed to start a 10-day ceasefire at 5:00 PM EST (21:00 GMT), pausing the conflict between Israel and Hezbollah amid the ongoing war with Iran.
Fed to focus on inflation; US labor market remains healthy
Data-wise, US Initial Jobless Claims fell to 207K for the week ending April 11, under the expected 215K, and below the prior week’s 218K. Despite this, recent employment and JOLTS data suggest a period of both low hiring and low layoffs.
In the meantime, US Industrial Production decreased from 0.7% to -0.5% MoM in March, with the largest declines in motor vehicles, parts, and utilities, suggesting an economic slowdown.
Federal Reserve (Fed) officials reinforced the central bank’s current policy path. New York Fed President John Williams noted that the conflict in Iran is exerting upward pressure on prices and anticipates an increase in headline inflation. He also commented that the central bank’s policy stance remains appropriately positioned.
Governor Stephen Miran, while echoing some of these sentiments while maintaining a notably dovish outlook, indicated an expectation of three rather than four interest rate cuts, citing “less favorable” inflation developments.
Given the backdrop, a de-escalation of the Middle East conflict decreases Gold’s safe-haven appeal. Nevertheless, if crude prices fall, it could ease inflationary pressures and justify further easing by the Fed if the deflation process resumes. Therefore, a low-interest rate scenario opens the door for further upside in the precious metals.
XAU/USD technical outlook: Gold’s poised to remain sideways
Price action suggests that Gold is poised to consolidate within a defined range. On the upside, the 50-day Simple Moving Average (SMA) at $4,896 is the first key resistance level on the yellow metal’s path to $5,000. Downwards, the first support is the psychological $4,700 milestone, ahead of the 100-day SMA at $4,691.
The Relative Strength Index (RSI) shows a favorable outlook for Gold’s upside, but it has flattened, suggesting indecision.
If Gold clears $4,900, the next area of interest would be $4,950, ahead of $5,000. On the flipside, if sellers clear the 100-day SMA at $4,691, expect a drop to $4,650 ahead of the 20-day SMA at $4,638. Below lies the $4,600 figure.
Gold FAQs
Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
Speaking to reporters outside of the White House on Thursday, US President Donald Trump made a series of statements surrounding the ongoing confrontation with Iran.
Key Trump Highlights
Making a lot of progress on Iran.
Not sure ceasefire needs to be extended.
Iran willing to do things today they previously weren't.
If there's no deal with Iran, fighting will resume.
Iran has agreed they won't have a nuclear weapon.
We're very close to a deal with Iran.
Iran has agreed to give us back the nuclear dust.
Iran has agreed to almost everything.
If Iran deal is signed in Islamabad, I may go (to China).
Standard Chartered Bank economists Madhur Jha and Ethan Lester assess how the Middle East conflict could affect global remittances. They argue that Gulf Cooperation Council (GCC) economies are key sources of remittance inflows for countries such as Egypt, Pakistan, Philippines, Bangladesh and Sri Lanka. While the non-oil impact is seen as smaller than COVID-19, a prolonged conflict could trigger expat relocation and weaker remittance flows.
GCC-driven remittance risks under conflict
"The ongoing energy price shock is the biggest risk to the global outlook, potentially tipping the global economy into recession if sustained. Our concerns are compounded by the physical disruption to oil and gas supply, which is already beginning to impact activity across many economies, especially in Asia. Disruption to the supply of other key products that pass through the Strait of Hormuz also threatens many downstream production activities."
"In this note, we highlight some other broader ramifications that could become more evident over time if the conflict persists. The Middle East, especially GCC economies, hosts a large number of expats who drive significant personal remittances, bolstering balance of payments (BoP) positions for other economies. The Middle East has increasingly also become a destination, as well as a source, for international travel and tourism."
"The impact of the ongoing conflict on remittances is not straightforward. During COVID-19, initial multilateral estimates assumed a sharp drop in remittances (a 20-40% drop) due to the sudden seizing up of activity. Surprisingly, however, remittances fell only by a small 2.4% y/y in 2020 for several reasons."
"The non-oil economic impact of this conflict is unlikely to be comparable to what we saw during COVID, given how extreme the pandemic impact was. So far, there is also limited evidence of any significant withdrawal of expats from the region. However, if the conflict persists, it raises the risk of a more significant relocation of expats out of the region, with remittances falling."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- Gold holds within a multi-week range as traders await clarity on US-Iran talks.
- Oil-driven inflation risks support a steady Fed outlook, limiting Gold upside.
- Technically, XAU/USD remains range-bound between 50-day and 100-day SMAs.
Gold (XAU/USD) everses earlier gains on Thursday, though it remains confined within a multi-week range as traders refrain from placing strong directional bets while awaiting clearer signals on US-Iran peace talks. XAU/USD is trading around $4,790 at the time of writing, after reaching an intraday high of $4,838, with a modest recovery in the US Dollar (USD) acting as a headwind.
Optimism builds around US-Iran talks
Markets remain cautiously optimistic that a deal could be reached to end the US-Iran war after US President Donald Trump indicated that negotiations could resume this week after last weekend’s talks in Islamabad failed to produce a breakthrough.
However, Gulf and European officials see a US-Iran deal taking up to six months to finalize, according to a Bloomberg report. They are also urging an extension of the current ceasefire over that period and calling for the immediate reopening of the Strait of Hormuz to restore energy flows, warning that prolonged disruption could risk triggering a global food crisis.
Separately, Iran is moving to formalize its control over the Strait of Hormuz, with state media reporting that any planned transit tolls would be paid via Iranian banks, underscoring the country’s push to tighten its grip on a key global Oil chokepoint.
Meanwhile, diplomatic efforts led by Pakistan continue. A senior Iranian official said on Thursday that “the visit by Pakistan’s army chief has helped narrow differences in some areas,” adding that “there are now greater hopes for a ceasefire extension and a second round of talks.” Although “fundamental disagreements over nuclear issues persist.”
Gold outlook tied to US-Iran developments and Oil prices
While diplomacy has improved risk sentiment, the situation remains far from resolved. A possible US-Iran deal remains a key variable for Gold, which is currently trading around 10% below its peak since the war began, as Oil-driven inflation risks fueled expectations that central banks, particularly the Federal Reserve (Fed), may need to raise interest rates.
Although Crude prices have eased from recent highs, reviving some Fed rate-cut bets, they remain elevated as supply through the Strait of Hormuz continues to face significant disruption amid a dual blockade by US forces and Iran. This keeps inflation concerns in focus, reinforcing expectations that the Fed will likely keep interest rates unchanged in the near term.
If tensions ease further and Oil prices decline, it could help reduce inflation pressure and lessen the burden on central banks, which might in turn support Gold.
St. Louis Fed President Alberto Musalem said that “supply shocks are placing the Fed’s inflation and employment targets at risk,” adding that “the current rate range is likely appropriate for some time.” He further noted that “the Oil shock is probably feeding into core inflation, which could remain near 3% through the end of the year.”
Technical analysis: XAU/USD consolidates below 50-day SMA
From a technical perspective, the daily chart shows that the metal remains under pressure below the 50-day Simple Moving Average (SMA), currently near $4,897, which acts as immediate overhead resistance. Meanwhile, the 100-day SMA near $4,708 provides immediate support, keeping price action range-bound.
The 14-period Relative Strength Index (RSI) around 51 has recovered toward neutral territory, while the Average Directional Index (ADX) near 24 suggests a modest but not particularly strong underlying trend as price consolidates below its primary short-term average.
On the downside, a sustained break below the 100-day SMA would signal a breakdown of the recent range and increase bearish pressure. Conversely, a daily close back above the 50-day SMA would be needed to ease immediate downside pressure and signal that bulls are regaining control.
Inflation FAQs
Inflation measures the rise in the price of a representative basket of goods and services. Headline inflation is usually expressed as a percentage change on a month-on-month (MoM) and year-on-year (YoY) basis. Core inflation excludes more volatile elements such as food and fuel which can fluctuate because of geopolitical and seasonal factors. Core inflation is the figure economists focus on and is the level targeted by central banks, which are mandated to keep inflation at a manageable level, usually around 2%.
The Consumer Price Index (CPI) measures the change in prices of a basket of goods and services over a period of time. It is usually expressed as a percentage change on a month-on-month (MoM) and year-on-year (YoY) basis. Core CPI is the figure targeted by central banks as it excludes volatile food and fuel inputs. When Core CPI rises above 2% it usually results in higher interest rates and vice versa when it falls below 2%. Since higher interest rates are positive for a currency, higher inflation usually results in a stronger currency. The opposite is true when inflation falls.
Although it may seem counter-intuitive, high inflation in a country pushes up the value of its currency and vice versa for lower inflation. This is because the central bank will normally raise interest rates to combat the higher inflation, which attract more global capital inflows from investors looking for a lucrative place to park their money.
Formerly, Gold was the asset investors turned to in times of high inflation because it preserved its value, and whilst investors will often still buy Gold for its safe-haven properties in times of extreme market turmoil, this is not the case most of the time. This is because when inflation is high, central banks will put up interest rates to combat it. Higher interest rates are negative for Gold because they increase the opportunity-cost of holding Gold vis-a-vis an interest-bearing asset or placing the money in a cash deposit account. On the flipside, lower inflation tends to be positive for Gold as it brings interest rates down, making the bright metal a more viable investment alternative.
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Our dedicated focus on forex news and insights empowers you to capitalise on investment opportunities in the dynamic FX market. The forex landscape is ever-evolving, characterised by continuous exchange rate fluctuations shaped by vast influential factors. From economic data releases to geopolitical developments, these events can sway market sentiment and drive substantial movements in currency valuations.
At Rakuten Securities Hong Kong, we prioritise delivering timely and accurate forex news updates sourced from reputable platforms like FXStreet. This ensures you stay informed about crucial market developments, enabling informed decision-making and proactive strategy adjustments. Whether you’re monitoring forex forecasts, analysing trading perspectives, or seeking to capitalise on emerging trends, our comprehensive approach equips you with the insights needed to navigate the FX market effectively.
Stay ahead with our comprehensive forex news coverage, designed to keep you informed and prepared to seize profitable opportunities in the dynamic world of forex trading.
