XAU/USD Current price: $4,544

• Iran and the United States reportedly reached an agreement.
• US data showed the economy remained resilient in May despite ongoing turmoil.
• XAU/USD shrugged off the near-term negative tone, further gains still unclear.

Spot Gold trades in the $4,540 region, recovering in the American afternoon. The US Dollar (USD) started the day on the back foot amid hopes the United States (US) and Iran were working their way towards a deal. Optimism, however, faded as the day went by, with the usual standoff between both reviving concerns. As a result, the Greenback and Oil recovered, while high-yielding assets retreated.

Mid American session, however, headlines indicated that both countries have reached an agreement via Pakistan mediation, and that the announcement will be made in a matter of hours. The USD resumed its slide and pushed XAU/USD into positive territory.

Data-wise, S&P Global released the flash estimate of the US Composite Purchasing Managers Index (PMI), confirming a reading of 51.7 in May, matching the April outcome. Manufacturing output improved to 55.3 from the previous 54.5, also surpassing expectations of 54. Finally, the Services PMI resulted at 50.9, slightly below the 51 posted in April.

XAU/USD short-term technical outlook

The 4-hour chart shows XAU/USD has shrugged off the negative stance, but additional gains are still unclear. Technical indicators turned north, but remain below their midlines. At the same time, the pair has crossed above a flat 20 Simple Moving Average (SMA), now providing near-term support at around $4,520. The same chart shows that the 100 and 200 SMAs maintain their downward slopes far above the current level, limiting the upward scope.

Bigger time frames, however, hint at bears holding the grip but staying on pause. Technical indicators in the daily chart aim marginally lower within negative levels, but lack directional strength. At the same time, a bearish 20 SMA stands at $4,620, providing strong resistance while the 100 SMA holds far above the shorter one, further limiting the bullish case.