Ongoing tensions in the Middle East may limit gold’s upside potential. Earlier, U.S. President Donald Trump hinted that he would soon declare the Strait of Hormuz “U.S. territory,” while Iranian Deputy Foreign Minister Kazim Garibabadi called on the United States to “accept the reality of failure and stop indulging in fantasies.” On Friday, Iranian Foreign Minister Abbas Araghchi stated, “There are currently no negotiations taking place between Tehran and Washington.” Araghchi added that the U.S. must agree to Iran’s conditions in order to resume shipping through the strait. Analysts at Commerzbank believe the overall environment for the gold market remains favorable, noting: “Since we do not expect the Federal Reserve to raise interest rates, gold prices still have room to rise further.”

The CME FedWatch tool shows that the market’s probability of the Federal Reserve raising interest rates by 25 basis points to 3.75%–4.00% at its September 16 meeting has fallen to 33.1%. By comparison, this probability stood at 33.9% a day earlier, 44.4% a week ago, and was still at 50% a month ago. U.S. consumer confidence fell in August for the first time in three months, as households’ concerns about a deteriorating business environment and rising prices intensified, leading to a weakening in consumers’ views on both the short- and long-term outlook for the U.S. economy. Combined with the fact that U.S. retail sales in July posted their largest decline in over a year—driven primarily by reduced spending on automobiles and online shopping—this indicates that consumers are beginning to cut back on certain expenditures amid high prices and sluggish income growth. Consumer spending has long been a key driver of U.S. economic growth; therefore, declining confidence, weak real wages, and softening retail sales may further fuel market concerns about a slowdown in consumer momentum.

On the four-hour chart, the Bollinger Bands are beginning to narrow, moving averages have flattened, and the MACD fast and slow lines are on the verge of forming a golden cross, suggesting a high probability of continued upward movement. The RSI stands at 57, indicating that market participants are largely adopting a wait-and-see approach. On the daily chart, the Bollinger Bands are widening upward, and the moving averages are diverging upward. The MACD fast and slow lines continue to trade above the 0-line, confirming the ongoing bullish trend. With the RSI at 64, market participants are predominantly buying. The recommended strategy is to go long on dips.

Trading Direction: Long

Entry Price: 4390

Target Price: 5200

Stop-Loss Price: 3900

Support Levels: 3900, 3600, 3500

Resistance Levels: 4500, 4700, 5200