Gold (XAU/USD) reached a new weekly high earlier today but failed to build on its upward momentum and continues to trade below the $4,100 level. Despite the ongoing military confrontation between the United States and Iran, market participants continue to expect a diplomatic resolution, particularly after U.S. Secretary of State Marco Rubio stated that Washington remains open to negotiations with Tehran. This reduces demand for the U.S. dollar as a safe-haven currency, which has traditionally been one of the key factors supporting gold prices.

At the same time, investors remain concerned about inflationary pressures stemming from higher energy prices, which could prompt the Federal Reserve to maintain a restrictive monetary policy stance, thereby supporting the U.S. dollar. Additional uncertainty comes from restrictions on shipping through the Strait of Hormuz, which have caused significant disruptions to global oil supplies. The situation has been further aggravated by a statement from the Iran-backed Houthi movement in Yemen announcing a maritime blockade of Saudi Arabia. This could continue to support oil prices, reinforcing inflation expectations and increasing speculation that U.S. interest rates will remain elevated for an extended period.

According to the CME Group FedWatch Tool, traders are pricing in an approximately 83% probability of another Federal Reserve interest rate increase by the end of the year. This outlook supports a bullish near-term view of the U.S. dollar and justifies caution before initiating aggressive long positions in gold.

At the same time, the recent escalation of tensions between the United States and Iran has further strengthened the U.S. dollar's appeal as a safe-haven currency, limiting the upward potential for gold.

Reports indicate that U.S. forces have carried out strikes against Iran for the tenth consecutive night, while the White House has stated that the operations will continue until President Donald Trump decides otherwise. In response, Iran announced strikes on U.S. military bases and allied infrastructure in the Persian Gulf. This increases the risk of a broader regional conflict, which could provide additional support for the U.S. dollar.

From a technical perspective, bulls are attempting to break above and consolidate above the 20-day Simple Moving Average (SMA), which would help ease the current bearish pressure. However, to regain full control of the market, they must also break above the 200-day SMA. Initial support is located at the psychological $4,000 level, followed by $3,960 and the yearly low. Momentum indicators remain in negative territory, indicating that bears continue to hold the advantage.