XAU/USD sellers attack critical 200-day SMA near $4,400 on renewed Iran risks

• Gold falls for the third straight day early Thursday, hitting the lowest level in two months near $4,400.
• The US Dollar stands tall on renewed US-Iran escalation and rebounding Oil prices.
• Technically, Gold looks to crack the 200-day SMA just below $4,400 amid bearish momentum.

Gold has extended its downward spiral early Thursday, testing bids at the $4,400 threshold, while hitting two-month lows.

The ongoing Gold price downtrend is mainly fuelled by fading hopes of a US-Iran peace deal being reached anytime soon, especially after fresh attacks by the United States (US) on Iran.

On Monday, the US Central Command (CENTCOM) said it carried out new strikes on southern Iran, targeting missile sites and boats allegedly attempting to place naval mines.

In response, Iran’s Foreign Ministry said Iran “will not leave any act of mischief unanswered and will not hesitate in defending the country’s integrity” in a statement on Tuesday, accusing the US of violating the ceasefire.

Early Thursday, US CENTCOM confirmed that they carried out new strikes on Iran, targeting a military site in Bandar Abbas, a strategic port city.

US President Donald Trump said he won’t rush into a deal with Iran, while reiterating that the Strait of Hormuz will be “open to everybody” and that the US will “watch over it.”

On Wednesday, Trump said that the US is not easing sanctions on Iran and that the US would not unfreeze Iranian assets.

Additionally, the US Treasury Department said it has sanctioned the Persian Gulf Strait Authority, the body Iran has set up to manage the Strait of Hormuz.

The latest escalation by the US and Trump’s comments risk a major retaliation from Iran, which could unravel the fragile truce. Therefore, traders continue scouting for safety in the US Dollar (USD), weighing heavily on the USD-sensitive bullion.

Furthermore, the latest rebound in Oil, fuelled by the renewed US-Iran tensions, revives inflation concerns and justifies markets’ expectations of an interest rate hike by the US Federal Reserve (Fed) by the end of this year, adding to the Greenback’s uptick at the expense of Gold.

Against this backdrop, Gold remains vulnerable, eyeing further downside if the critical support on the daily chart is broken decisively amid a new wave of US-Iran geopolitical escalation.

Traders will also pay attention to the Fed’s preferred inflation measure, the core Personal Consumption Expenditures (PCE) Price Index, for fresh cues on the central bank’s path forward on interest rates.

In the daily chart, XAU/USD trades at $4,396.65, maintaining a bearish near-term bias as spot holds beneath a dense band of moving average resistance. Price sits just under the 200-day simple moving average (SMA) at $4,398.92, while the 21-day and 50-day SMAs at roughly $4,586 and $4,628, respectively, remain well above, reinforcing the broader downtrend that continues to track a descending resistance trend line. The Relative Strength Index (14) around 35 suggests weak momentum and lingering downside pressure, even as oversold conditions start to emerge.

On the topside, initial resistance is defined by the 200-day SMA clustered near $4,399, with the short-term 21-day SMA around $4,586 forming the next cap, followed by the 50-day SMA near $4,628. Further up, the 100-day SMA at about $4,801 and the overarching downward resistance trend line provide an additional supply zone that would likely limit any recovery attempts unless decisively reclaimed. With no clear nearby structural floors evident in the current dataset, the metal remains vulnerable to further slippage while it trades below this stacked moving-average ceiling.