On Tuesday, gold (XAU/USD) came under renewed selling pressure and surrendered part of the previous day's gains, when prices rose toward resistance in the $4,150 level. However, by the start of the European session, the price remained above $4,100. Growing expectations of interest rate hikes by the US Federal Reserve have become the main factor prompting investors to reduce their exposure to gold. At the same time, the US dollar has yet to attract sustained demand, as reports of diplomatic contacts between the United States and Iran remain contradictory. This provides some support for gold, while traders are adopting a wait-and-see approach ahead of the release of US consumer inflation data.

Against the backdrop of the latest developments in the Middle East, US President Donald Trump reported positive progress toward ending the conflict with Iran. He stated that a resumption of strikes was unlikely, effectively declaring the conflict over. However, Mohsen Rezaei, Secretary of Iran's Supreme National Security Council, denied reports of active negotiations, describing them as "fake news." He also reiterated that Washington must accept Tehran's seven conditions for the conflict to be resolved. The uncertainty sustains the geopolitical risk premium. Although it does not increase demand for the US dollar, which is traditionally regarded as a "safe haven," it does help support gold prices.

Meanwhile, the US Nonfarm Payrolls (NFP) report released last Friday showed that the economy added 165,000 jobs in October, exceeding even the most optimistic forecasts. Figures for August and September were also revised upward, with a combined adjustment of 84,000. The decline in the unemployment rate to 4.1% points to economic resilience and strengthens expectations of further monetary policy tightening by the Fed. According to CME Group's FedWatch tool, traders now assign a probability of more than 80% to an interest rate hike by the US central bank in December. These expectations are weighing on gold.

Nevertheless, market participants are waiting for additional signals regarding the Fed's next steps. The US Consumer Price Index (CPI) is in focus, as its release could have a significant impact on the US dollar and provide gold with a fresh directional impulse. Therefore, before considering the recent recovery in XAU/USD complete and opening positions in anticipation of a resumption of the downward trend observed over the past two months, it would be prudent to wait for confirmation that selling pressure is increasing again. Last month, the pair recovered from a low near $3,870, its lowest level since September 2025.

In the short term, the outlook for XAU/USD remains positive. This has been supported by the recent breakout above the 100-period and 200-period simple moving averages (SMA) on the four-hour chart. Momentum indicators are also maintaining moderately bullish signals: the Relative Strength Index (RSI) is hovering around 57, while the MACD is also in positive territory. This indicates that further upside potential remains, with no signs of an overheated market.

In the event of a correction, the nearest support could be found at the 9-period EMA near $4,106 and the round level of $4100. A more significant support is found at the 100-period SMA ($4048): holding it is important to maintain the current bullish structure. The nearest resistance from above corresponds to the level around $4,155. Next, the $4,200 level may become a guideline for buyers.

The table below shows the percentage change in the US dollar against major currencies since the beginning of the current week. The dollar has recorded its largest gain against the Canadian dollar.