Gold Price Forecast: XAU/USD Rally Fails After Iran Spike- 5% Drop Snaps Four-Week Streak

Gold Technical Forecast: XAU/USD Weekly Trade Levels

Gold reversed sharply after failing to secure a close above resistance following the Iran-driven spike.
The pullback has erased more than 5% from the weekly high before stabilizing, ending a four-week winning streak.
Momentum remains elevated on higher timeframes, but sustained weakness below key support would increase the risk of a broader corrective phase.
Event risk ahead: US CPI & PCE
Resistance 5342/43 (key), 5520-5615, 5768– Support 4894, 4791(key), 4533

Gold’s advance stalled after a brief geopolitical spike pushed prices into resistance, with the market reversing sharply earlier in the week before stabilizing into the close. Although XAU/USD has managed to recover part of the initial drop, the failure to secure a sustained break above resistance leaves the broader rally at an inflection point. With momentum stretched on higher timeframes and price now consolidating beneath a key ceiling, the focus shifts to whether buyers can reassert control or if the pullback extends into a deeper corrective phase. Battle lines drawn on the XAU/USD weekly technical chart.

Review my latest Weekly Strategy Webinar for an in-depth breakdown of this gold setup and more. Join live on Monday’s at 8:30am EST.

Gold Price Chart – XAU/USD Weekly

Chart Prepared by Michael Boutros, Sr. Technical Strategist; XAU/USD on TradingView

Technical Outlook: In last week’s Gold Technical Forecast we noted that, “A four-week rally is testing uptrend resistance into the close of the month. From a trading standpoint, losses would need to be limited to 4894 IF price is heading higher on this stretch with a close above 5343 needed to retest the record high.” Gold rallied into the start of the week as war broke out in Iran and despite briefly registering an intraday high at 5419, XAU/USD was unable to mark a daily close above resistance with price snapping a four-week winning streak to close nearly 2.5% lower- the largest weekly decline since the start of the year.

Gold dopped more than 5% off the weekly high before stabilizing and while momentum does remain in overbought condition, weekly RSI is now approaching the lowest levels of the year near 70. Watch this next week- the bulls will want to keep momentum elevated for the February rally to remain viable in the weeks ahead while a break back from overbought condition would threaten a larger pullback within the broader uptrend.

Initial support remains with the record high-week close at 4894 and is backed by the 61.8% retracement of the February rally at 4791. The lower parallel of the August pitchfork converges on this retracement next week and we’ll reserve this slope as our medium-term bullish invalidation level. A break of this formation would be needed to suggest a more significant high is in place and that a larger reversal is underway. Subsequent support is eyed at the 2025 high close at 4533.

Key resistance remains at 5342/43- a region defined by the 78.6% retracement of the decline off the record high and the 100% extension of the February advance. Note that the median-line converges on this threshold over the next few weeks and remains a key hurdle for the bulls. A breach / weekly close above this slope would threaten another test of the record high with topside resistance objectives eyed at the 2.618% extension of the December 2024 advance and the 1.618% extension of the August rally at 5520-5615 and the 1.618% extension at 5768.

Bottom line: Gold remains capped by confluent resistance and while the broader outlook remains constructive, the immediate advance may be vulnerable while below the median-line. From at trading standpoint, the outlook remains unchanged and losses would need to be limited to 4894 IF price is heading higher on this stretch with a close above 5343 needed to fuel the next leg of the advance.

Keep in mind we get another batch of inflation data next week with the February Consumer Price Index (CPI) and January Personal Consumption Expenditures (PCE) on tap. With the Friday’s Non-Farm Payroll report coming in far below expectations (-92K), the Fed is once again confronted between the threat rising prices and weaker labor growth and traders will be trying to assess the impact on the interest rate outlook. As of now, Fed Fund Futures are pricing a probability of just above 60 percent the next rate-cut will be in July. This has shifted dramatically on the heels of today’s labor report and inflation data next week may see further adjustment to the monetary policy outlook. Stay nimble into the releases and watch the weekly close for guidance here. Review my latest Gold Short-term Outlook for a closer look at the near-term XAU/USD technical trade levels.

Key US Economic Data Releases

Economic Calendar - latest economic developments and upcoming event risk.

Active Weekly Technical Charts

--- Written by Michael Boutros, Senior Technical Strategist

Follow Michael on X @MBForex

From time to time, StoneX Financial Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.

As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.

FOREX.com is a trading name of StoneX Financial Pty Ltd.

The material provided herein is general in nature and does not take into account your objectives, financial situation or needs.

While every care has been taken in preparing this material, we do not provide any representation or warranty (express or implied) with respect to its completeness or accuracy. This is not an invitation or an offer to invest nor is it a recommendation to buy or sell investments.

StoneX recommends you to seek independent financial and legal advice before making any financial investment decision. Trading CFDs and FX on margin carries a higher level of risk, and may not be suitable for all investors. The possibility exists that you could lose more than your initial investment and CFD investors do not own or have any rights to the underlying assets.

It is important you consider our Financial Services Guide and Product Disclosure Statement (PDS) available at www.forex.com/en-au/terms-and-policies/, before deciding to acquire or hold our products. As a part of our market risk management, we may take the opposite side of your trade. Our Target Market Determination (TMD) is also available at www.forex.com/en-au/terms-and-policies/.

StoneX Financial Pty Ltd, Suite 42.01, 264 George Street, Sydney, NSW 2000 (ACN 141 774 727, AFSL 345646) is the CFD issuer and our products are traded off exchange.

Delayed London Stock Exchange (LSE) Data

The London Stock Exchange (LSE) market data displayed or referenced on this website is provided on a delayed basis and is not in real time. The delay period may vary but is typically at least 15 minutes. This data is intended for information purposes only and should not be relied upon for trading, investment, or other financial decisions. We do not guarantee the completeness, reliability, or suitability of the data for any particular purpose. Users should consult real-time data sources and obtain professional advice before making any financial decisions.