XAU/USD Outlook: Weak Bounce, Downside Still Likely

Gold (XAU/USD) started the week lower around $4,445, falling over 1%. This drop coincides with rising oil prices, as WTI trades above $102.50. Higher oil pushes inflation expectations up, which could keep interest rates more elevated. Since gold doesn’t yield interest, this pressure tends to weigh on its price.

Tensions in the Middle East add uncertainty. Reports indicate the US might increase its military presence near Iran, while Iran has issued strong warnings. Meanwhile, diplomatic talks seem to be ongoing, creating a mixed picture.

Technically, the trend remains bearish. The recent rise from 4185 isn’t a reversal but a weak bounce. Price movement is slow, with overlapping candles and little momentum. It resembles a bear flag inside a downtrend.

Key levels to watch are 4470–4490 as immediate resistance, 4520–4535 as stronger resistance on higher timeframes, 4350–4380 as support, and 4185 as major support.

Price recently tested resistance near the moving average and trendline but failed to break through. This rejection signals weakness rather than strength.

Sellers dominate around 4470–4520, and buyers lose momentum on each attempt to push higher. Momentum remains flat, confirming a lack of strong buying pressure.

As long as price stays below 4490, the bearish setup holds. A drop below 4430–4400 could pull price down to 4350 and possibly 4185.

A bullish turn requires a solid breakout and a sustained hold above 4520–4535. Without that, any upward move is likely a short-term liquidity run before prices fall again.

The focus should be on short trades near resistance. Wait for signs of rejection, confirmation, and a shift in momentum before entering. Avoid trading in the middle of the range.

Overall, the move is still corrective into resistance, with downside risks more likely unless price breaks and stays above 4520.

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