15.04.202610:38 Forex Analysis & Reviews: XAU/USD: analysis and outlook. Risks in Strait of Hormuz scale down USD sell-offs and restrain gold rally

Risks in the Strait of Hormuz have weakened the recent trend of US dollar selling, which is limiting upside in the commodity. Hopes for Iranian diplomacy and lower forecasts for Fed rate hikes are restraining the dollar's rebound.

Gold (XAU/USD) has pulled back to the round level of $4,800.

Against the backdrop of persistent uncertainty about reaching a durable agreement between the US and Iran and turbulence around the Strait of Hormuz, the US dollar has halted its decline, putting pressure on gold prices. Washington's tightening of sanctions and the maritime blockade are being seen by Tehran as a serious encroachment on sovereignty, and Iran's UN envoy's statement only underlined the scale of the confrontation. Additional tension stems from statements by the Islamic Revolutionary Guard Corps (IRGC) about readiness to respond, which keeps geopolitical risks elevated and at the same time boosts demand for the US dollar as a reserve safe?haven asset, reducing appetite for gold.

Nevertheless, market participants still expect a diplomatic window with Iran to remain open. A lower probability of further Fed tightening also caps the dollar's upside and creates a supportive backdrop for the non-yielding precious metal, limiting the depth of the correction and encouraging caution toward aggressive short positions in gold.

In recent public remarks, US Vice President JD Vance expressed guarded optimism, saying Washington is interested in striking a broader "grand bargain" that would restructure Iran's economic integration into the global system.

Meanwhile, UN Secretary General Antonio Guterres noted a high likelihood of renewed talks between the US and Iran, fueling hopes of an extended ceasefire and eased tensions. Those expectations, together with diplomatic progress, have contributed to dollar weakness over the past two weeks and helped gold remain above $4,800 per ounce.

Macroeconomic data published on Tuesday showed the US Producer Price Index (PPI) accelerated to 4.0% year-on-year in March from 3.4% a month earlier. On a monthly basis, the PPI rose 0.5%, while the core measure excluding food and energy increased 3.8% year-on-year. The readings came in below market forecasts, easing fears of a large inflationary impulse from rising energy prices and tempering hawkish expectations for further Fed action. As a result, falling US Treasury yields limit the dollar's upside and support the likelihood of buyers stepping in on gold dips to add to long positions.

Technically, XAU/USD is trying to establish a bullish bias: the RSI has moved into positive territory, while the MACD remains negative. A close above the 50-day SMA would hand control to the bulls. If $4,800 does not hold, the nearest support is the convergence of the 9- and 14-day EMAs just above the round $4,700 level.