Gold (XAU/USD) steadies before UN talks on Iran war

FUNDAMENTAL OVERVIEW

Gold has remained underpinned since the FOMC decision as the market has walked back the hawkish overreaction. The central bank's projections pointed to a less aggressive rate path than what investors had been pricing in, and Fed Chair Warsh largely echoed his Jackson Hole remarks.

In addition, the recent drop in oil prices, driven by hopes of a possible de-escalation, has taken some pressure off inflation and lessened rate hike concerns.

Attention now turns to tomorrow's UN General Assembly, where Trump has scheduled a meeting with Gulf leaders on the sidelines to talk about the next steps in the conflict with Iran. The Iranian delegation has been permitted to take part in the Assembly, so a Trump-Pezeshkian meeting is likely.

A de-escalation would push oil prices down, which would further ease inflation and rate hike fears, ultimately providing support for gold.

Economic data will also matter given where the market is positioned. When positioning and expectations are stretched, even a slight data surprise can trigger a sharp reversal. If US data begins to disappoint, expectations for aggressive rate hikes will likely diminish, giving gold an extra lift.

GOLD TECHNICAL ANALYSIS – DAILY TIMEFRAME

On the daily chart, gold rebounded strongly from the key 4,300 support but met resistance near the 4,400 level. Should the price fall all the way back to that support, buyers are likely to step in there with a defined risk below it, positioning for a rally toward the 4,510 level. Sellers, on the other hand, will be watching for a break below to target a drop to the 3,885 level.

GOLD TECHNICAL ANALYSIS – 4 HOUR TIMEFRAME

On the 4-hour chart, the price is breaking above the downward trendline that had been defining the bearish structure. Buyers may pile in around these levels with a defined risk below the most recent swing low at 4,334, keeping the push toward 4,510 intact. Sellers, meanwhile, need a break below 4,334 to start targeting a move under the major 4,300 support.

GOLD TECHNICAL ANALYSIS – 1 HOUR TIMEFRAME

On the 1-hour chart, a minor downward trendline is capping the bearish momentum. If a pullback occurs, sellers will likely lean on the trendline with a defined risk above it to keep pressing for new lows. Buyers, conversely, will look for a break higher to add to bullish bets toward the 4,510 level. The red lines mark today's average daily range.

UPCOMING CATALYSTS

Tomorrow, Trump meets with Gulf leaders and possibly Iran's President at the UN General Assembly. On Wednesday, the Flash US PMIs are due, and on Thursday, the Trump-Xi meeting takes place.