Last Updated on August 25, 2026 by Deon
Gold prices are taking a break after a big jump pushed gold to a new three-month high. XAU/USD hit $4,697 during Asian trading on Tuesday but then it dropped back down because traders were busy selling to take their profits. At the time of the FXStreet report gold was trading near $4,640 after it hit a low of around $4,618 during the day.
With this small drop the overall outlook for gold still looks good. Things like US Treasury news lots of money flowing into ETFs world tensions and a strong chart pattern are keeping people interested in buying gold.
Gold Rally Pauses as Traders Take Profits
This recent dip looks like a pause than a big change in direction. The recent rise in gold pushed the Relative Strength Index (RSI) into the “zone, which makes some traders want to lock in their profits after such a fast move up.
The US Dollar also got a little stronger which put some pressure on gold. The Dollar Index was trading near 99 after it fell to 98.56 week. Since gold is priced in US dollars a stronger dollar can make gold more expensive for people buying it in countries.
The market environment still seems to favor the precious metal.
Treasury Buybacks Support Gold Demand
One reason gold has been so strong lately is the worry about the US governments money situation and how that might affect the US Dollar.
According to TD Securities what is happening in the US Treasury market has made people want precious metals. It looks like Treasury buying will go up a lot between September 9 and November 4 as officials try to manage long-term yields.
These events have brought back the idea that the US Dollar might lose its value. When investors worry about the economy or the power of money gold helps because people see gold as something that does not rely on a government or a central bank.
Gold ETF Inflows Add Another Layer of Support
More people are investing too. Data from the World Gold Council showed that gold ETFs saw about $3.52 billion in money which is about 23.6 tonnes during the last week.
Far this year ETF inflows have reached about $21.34 billion or 116.1 tonnes. A lot of this demand is coming from Asia and Europe.
Big inflows into ETFs are important because they show that large investors are starting to buy gold alongside people.
Geopolitical Risks Keep Safe-Haven Demand Alive
Trouble in the Middle East is another reason for gold. Tensions between the United States and Iran are making markets nervous. Iran has said it is ready to react to US sanctions while Washington has added sanctions against Tehran.
Gold is usually a place to put money when people are worried about world conflicts. Even though oil prices have not moved much because of this energy prices are still higher than they were before the war. This keeps people worried about inflation and what the Federal Reserve will do.
Technical Outlook for XAU/USD
Looking at the charts gold still looks very strong.
XAU/USD is still above its 50-day 100-day and 200-day Simple Moving Averages, which are around $4,186 $4,379 and $4,520. This shows that the big upward trend is still going.
However things might be getting a bit overstretched. The daily RSI is near 71 which means gold is in territory even though the MACD is still positive.
The first big wall for gold is around $4,700. If gold can break past that the next target could be near $4,850.
On the side the $4,520 area near the 200-day SMA is an important spot to watch. If it goes below that traders will look at $4,379 and $4,186. Then even lower around $4,000.
Gold Level Technical Significance
$4,850 potential resistance
$4,700 Immediate resistance
$4,640 Recent trading area
$4,520 Major support / 200-day SMA
$4,379 Secondary support / 100-day SMA
$4,186 50-day SMA
$4,000 Deeper horizontal support
US PCE Inflation Data in Focus
The next big thing for gold might come from US news. Traders are waiting for the US Personal Consumption Expenditures (PCE) Price Index and Federal Reserve Chair Kevin Warsh is set to speak at the Jackson Hole Symposium this week.
Inflation data can change what people think the Federal Reserve will do with interest rates. If inflation is low people might think interest rates will drop, which could weaken the US Dollar and help gold.. If inflation is high interest rates might stay high which would put pressure on gold.
Gold Price Outlook
The fact that gold pulled back from $4,700 does not change the picture yet. The mix of momentum ETF money, Treasury news and world tensions still supports gold.
Still traders should remember that when the RSI is too high gold might move sideways or drop for a bit. The $4,700 level will be a psychological barrier to watch and $4,520 will be key to seeing if this dip is just a healthy part of the bigger trend.
For now gold stays in a position above its major moving averages but upcoming US inflation numbers and news, from the Federal Reserve will decide if buyers have enough strength to push XAU/USD past $4,700.
