• Gold meets with a fresh supply during the Asian session, though the downside seems limited.
• Inflation fears support US bond yields, underpinning the USD and weighing on the commodity.
• Rising Fed rate cut bets to cap gains for the buck and lend support to the non-yielding bullion.

Gold (XAU/USD) struggles to capitalize on the previous day's goodish rebound from the $4,737 area, or a one-week low, and attracts some sellers during the Asian session on Tuesday. The commodity slides closer to the $4,800 mark, though the downside seems cushioned as traders might refrain from placing aggressive directional bets amid continuing uncertainty over whether talks to end the US-Iran war will take place.

US President Donald Trump announced that US negotiators will travel to Pakistan for another round of negotiations with Iran, aiming to extend a fragile ceasefire that is set to expire on Wednesday. Meanwhile, Iranian officials are hesitant about further peace talks amid the US naval blockade. In fact, Iranian Parliament speaker Mohammad Bagher Ghalibaf said that Iran will not accept negotiations with the US while under threat. Moreover, Iran's Foreign Minister Abbas Araghchi said that continued violations of the ceasefire ‌by the US are a major obstacle to continuing the diplomatic process.

Latest reports, however, suggest that a delegation representing Iran is expected to travel to Islamabad for fresh negotiations with the US. Meanwhile, investors remain sceptical about a potential US-Iran agreement amid the standoff over the Strait of Hormuz, especially after the US Navy intercepted and seized an Iranian-flagged cargo ship in the Gulf of Oman. In response, Iran once again closed the strategic waterway, which acts as a tailwind for Crude Oil prices. This, in turn, revives inflationary concerns and offers some support to US bond yields, exerting some pressure on the non-yielding Gold price.

Furthermore, rising US bond yields offer some support to the US Dollar (USD), which is seen as another factor weighing on the commodity. The USD bulls, however, lack conviction amid diminishing odds for a rate hike by the US Federal Reserve (Fed). Instead, the CME Group's FedWatch Tool indicates that there is a roughly 45-50% chance of a Fed rate cut by the year-end, which should keep a lid on any meaningful USD appreciation and continue to act as a tailwind for the Gold. Hence, it will be prudent to wait for strong follow-through selling before positioning for any further XAU/USD depreciation.

XAU/USD 4-hour chart

Gold bulls have the upper hand as a breakout through 50% Fibo. and 200-EMA on H4 remains in play

The precious metal holds a constructive near-term bias as it sits above the 200-period Exponential Moving Average (EMA) at $4,784.25. The 50.0% retracement level of the March downfall, at $4,762.13, adds a secondary layer of underlying demand beneath the EMA. Meanwhile, momentum gauges remain subdued rather than directional, with the Relative Strength Index (RSI) hovering near a neutral 51, and the Moving Average Convergence Divergence (MACD) indicator is marginally negative. This hints that bulls retain structural control but lack strong follow-through for now.

In the meantime, immediate support is seen at the 200-period EMA at $4,784.25 and then the 50.0% retracement at $4,762.13. A sustained break below this cluster would expose deeper Fibonacci supports at $4,607.05 and $4,415.17 ahead of the broader swing low region near $4,105.01. On the topside, initial resistance emerges at the 61.8% Fibo. retracement at $4,917.21, with further hurdles at the 78.6% level at $5,138.01 and the cycle high region at $5,419.25, where any rejection would likely cap the current bullish phase.

(The technical analysis of this story was written with the help of an AI tool.)