XAU/USD Current price: $3,962.92

• Easing global trade tensions pushed investors away from safe-haven assets.
• The Federal Reserve will announce its monetary policy decision on Wednesday.
• XAU/USD maintains its negative bias after falling for three days in a row.

Spot Gold extended its bearish run on Tuesday, bottoming at $3,886.62 during European trading hours, then bouncing to the current $3,960 price zone. A better market mood weighed on safe-haven demand throughout the day, equally affecting the US Dollar (USD) and the precious metal.

The improvement in market sentiment was the result of easing global trade concerns after the United States (US) and Japan announced a trade deal that included rare earths and reaffirmed their previous agreement. Other than that, US President Donald Trump is meant to meet his Chinese counterpart Xi Jinping later in the week, and speculative interest believes they will find a way to avoid an escalation of tensions between the two economies.

Meanwhile, financial markets gear up for the Federal Reserve (Fed) monetary policy announcement. Officials will unveil their decision on Wednesday, and are widely anticipated to cut the benchmark interest rate by 25 basis points (bps). The focus will be on whether officials will provide additional hints on what’s next in monetary policy. Ahead of the announcement, investors have priced in one additional interest cut in December and one more in 2026.

From a technical point of view, and according to the 4-hour chart, XAU/USD is currently trading at around $3963, down for the day, and poised to extend its slide. A bearish 20 SMA slides beneath the 100 SMA and continues to post lower lows; the 20 SMA stands at $4,041, while the 100 SMA is directionless, flattening at $4,111 and capping the upside. Finally, the 200 SMA keeps advancing at $3,937, sitting below spot and offering initial support. Resistance aligns at $4,041/$4,111, whereas support is located at $3,937. The Momentum indicator remains well below the 100 mid-line, preserving a bearish tilt while the RSI indicator has recovered from an extreme oversold trough at 28 to 36 but is stabilizing below the 50 line, indicating sellers retain the upper hand and the bounce lacks conviction. A decisive break below the 200 SMA at $3,937 would likely reinforce the bearish bias and open the door to additional weakness, while a recovery through the falling 20 SMA at $4,041 is needed to ease immediate pressure and allow a subsequent test of the 100 SMA resistance at $4,111.

On the daily chart, XAU/USD is trading around $3,962. A bullish 20 SMA rallies above the current level, now providing resistance at around $4,070. Furthermore, the 100 SMA is bullish, below the current level of $3,566, while the 200 SMA continues to edge higher at $3,328. Finally, the Momentum indicator has slid decisively below its 100- hinting at increased selling pressure and an elevated risk of oversold conditions. Meanwhile, the RSI has retreated to 48, slipping beneath the 50 midline after prior extreme readings above 75, underscoring fading upside strength and a mild bearish tilt. Unless Momentum stabilizes and the RSI reclaims 50, corrective pressures may persist, with the 20-day SMA at $4,070 capping the upside, while the rising 100- and 200-day SMAs at $3,566 and $3,328 should continue to act as support on dips.

(This content was partially created with the help of an AI tool)