GOLD extends range play around $4,700, kicking off a Big week

• Gold trades listlessly around $4,700 amid cautious optimism, while bracing for a big week of central banks.
• The US Dollar stays defensive on reports that Iran offered US a deal to reopen the Strait of Hormuz.
• Gold tests the 21-day SMA support amid bearish RSI, while a cluster resistance near $4,750 crushes breakout hopes.

Gold finds fresh demand to retake the $4,700 level in Asia on Monday, as the US Dollar pauses its advance amid a recovery in risk sentiment and ahead of the key Federal Reserve (Fed) monetary policy decision due later this week.

Despite a stand-off between the United States (US) and Iran over the Strait of Hormuz and nuclear program, alongside pervasive inflation fears due to elevated Oil prices, markets are hopeful that the Iran war could end soon, promoting a modest risk recovery.

Following his remarks, Axios carried a story, citing a US official and two sources with knowledge of the matter, “Iran has given the US a new proposal to reopen the Strait of Hormuz and end the war that includes putting off nuclear negotiations,” per Bloomberg.

The positive shift in risk tone curbs the haven demand for the US Dollar (USD), dragging lower while lifting the bullion.

However, it remains to be seen if Gold sustains the latest leg up as traders could refrain from placing fresh bets on the bright metal ahead of key central bank policy meetings this week, including the Fed event risk on Wednesday.

In the meantime, profit-taking and fresh developments in the Middle East conflict could lead the way for Gold traders.

Daily technical analysis

In the daily chart, XAU/USD trades at $4,721.88. The metal holds just above the 21-day simple moving average (SMA) at $4,719.11 and has pushed over a reclaimed descending trend line now tracking around $4,709.76, hinting at a mildly constructive tone despite still sitting beneath the 100-day SMA at $4,746.61 and the 50-day SMA near $4,864.12. The Relative Strength Index (RSI) at 47.34 is neutral, suggesting consolidation rather than a decisive trend, with price caught between nearby short-term support and the heavier overhead averages.

On the topside, initial resistance emerges at the 100-day SMA around $4,746.61, with a break there exposing the more important 50-day SMA near $4,864.12 as the next barrier to recovery. On the downside, immediate support is seen at the reclaimed descending trend line around $4,709.76 and the nearby 21-day SMA at $4,719.11; a loss of this shelf would put focus on the higher rising trend support around $4,589.67, ahead of the lower uptrend line at $4,383.70 and the 200-day SMA at $4,257.49, where the broader bullish structure would be challenged.