Correction to the Downside Could Extend Toward 4200 Zone

Bond

Commodity

Summary:

This support region aligns closely with the 0.50 Fibonacci retracement level, raising the likelihood that a pullback could reach this target.

SELL XAUUSD

EXP

TRADING

4337.78

Entry Price

4240.00

4405.00

4346.02 +11.79 +0.27%

0.0

Pips

Flat

4240.00

Exit Price

4337.78

Entry Price

4405.00

Prospects for a de-escalation in the Middle East remain limited after U.S. President Donald Trump indicated he views it as unlikely that Iran will accept the conditions set out by Washington to end the conflict. In parallel, Tehran has hardened its stance, warning that the Strait of Hormuz will remain closed as long as the United States does not accept its demands.

Trump also reiterated his proposal to treat the strait as a zone under U.S. control and warned of potential military actions against Oman should it impede the reopening of the maritime route. For its part, Iran continues to defend its authority over the Strait of Hormuz, demanding that Washington agree to specific terms to fully restore maritime transit. Compounding these issues is the persistent disruption to commercial shipping in the Red Sea, a factor that continues to support international oil prices.

Against this backdrop, Al Jazeera reported that a U.S. official stated there is no contradiction in the messages issued by the White House regarding negotiations with Tehran, highlighting that discussions held were constructive. Nevertheless, Trump appears to have chosen to wait until Iran is ready to move toward an agreement.

On the economic front, U.S. data reflected a degree of slowing activity. Housing starts dropped 12.4% month-over-month in July, falling from 1.415 million to 1.239 million, weighed down by rising mortgage rates and high home prices. Similarly, industrial production expanded by just 0.2% month-over-month, missing the 0.3% growth expected by the market.

Investor attention now turns to the release of the minutes from the Federal Reserve's latest monetary policy meeting, as market participants search for additional cues regarding the future path of interest rates.

In fixed income markets, the yield on the 10-year U.S. Treasury note approached 4.75%, while the 30-year yield temporarily breached 5.30%—its highest level since 2007—before easing as the session progressed. An environment of elevated yields increases the opportunity cost of holding non-yielding assets, such as gold.

On the other hand, expectations for additional monetary policy tightening have receded. According to the CME Group FedWatch Tool, markets are currently pricing in roughly a 35% probability of a rate hike in September, down from 55% recorded a week ago. This shift has driven a sharper decline in short-term yields, whereas longer maturities have shown a more restrained correction as elevated energy prices keep inflation risks tilted to the upside. Correction to the Downside Could Extend Toward 4200 Zone_1

Correction to the Downside Could Extend Toward 4200 Zone_1

Technical Analysis

XAUUSD reacted aggressively to the downside after failing to break above resistance at 4434 on three separate occasions, and price now appears poised to push firmly below the 4330 support level. If this support gives way, a fresh downward push could target the 4239 area. Positioned near this zone is the 100-period moving average at 4230, while the 200-period average sits further below at 4154. Furthermore, this support region aligns closely with the 0.50 Fibonacci retracement level, raising the likelihood that a pullback could reach this target.

Turning to the oscillators, the RSI currently sits at 38, leaving further room to extend lower and signaling that sellers have taken control. Meanwhile, the MACD presents a bearish histogram that is beginning to gain depth once again, with the signal lines trending toward a bearish crossover of the neutral line; if realized, this would add further weight to a continued downside move.

Trading Recommendations

Trading direction: Sell

Entry price: 4338

Target price: 4240

Stop loss: 4405

Validity: Aug 30, 2026 15:00:00

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Correction to the Downside Could Extend Toward 4200 Zone

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