GOLD confirms a falling wedge breakout on US-Iran peace deal optimism

• Gold sits at one-week highs above $4,700 early Thursday, gathering strength for the next leg north.
• The US Dollar erases all gains since the US-Iran war started amid hopes for a peace deal.
• Gold script flips bullish, with a falling wedge confirmation on the daily chart and RSI back above 50.

Gold is gathering pace early Thursday, after having hit one-week highs above $4,700 on Tuesday. Markets remain expectant of a potential US-Iran peace deal being reached, supporting the renewed uptrend in Gold.

Gold continues to cheer the broader market optimism around a likely end to the US-Iran war, especially after an Axios report stated that the United States (US) believes it could be closing in on a 14-point memorandum of understanding (MoU) with Iran.

In response, Iran said on Wednesday it was reviewing a US peace proposal.The potential peace deal could lead to the reopening of the Strait of Hormuz and enable maritime traffic back to normalcy, which could weigh negatively on Oil price and ease inflation fears.

The market optimism, combined with receding inflation fears, could dissuade the US Federal Reserve (Fed) from maintaining a pause in its easing cycle in the coming months.

This narrative continues to undermine the US Dollar (USD) against its major peers, as it erases all its gains since the war started, boding well for the non-yielding and USD-sensitive Gold.

That being said, the next big move in Gold hinges on the US-Iran deal headlines and Friday’s US Nonfarm Payrolls (NFP) data.Economists are expecting the headline NFP to increase by about 60,000 in April after recording a blockbuster 178,000 job gain in March. The Unemployment Rate is seen steady at 4.3% in the same period.

The employment data is critical to know “whether the US economy remains resilient enough to keep the Fed’s monetary policy on hold, or whether a softening labor market could revive the case for rate cuts,” per Reuters.

Data published by the ADP on Wednesday showed that the US private employment rose by 109,000 jobs last month after a downwardly revised 61,000 gain in March, beating the 99,000 estimated print.

Daily technical analysis

In the daily chart, XAU/USD trades at $4,702.05, holding just above the 21-day simple moving average (SMA) around $4,701, which leaves a mildly constructive short-term tone, especially after Gold closed Wednesday above the descending trendline resistance, then near $4,595, confirming an upside break from a falling wedge pattern.

The pair remains capped beneath the 100-day SMA near $4,774 and the 50-day SMA around $4,790, keeping the upside in check while a neutral-to-slightly bullish bias prevails as the Relative Strength Index (RSI) hovers around 51, hinting at steady but not emphatic bullish momentum.

On the topside, a sustained break above the $4,774 area defined by the 100-day SMA would expose the denser barrier at the 50-day SMA around $4,790. On the downside, immediate intraday support is aligned with the 21-day SMA just under price at about $4,701, ahead of the rising support trend line drawn from the $4,367 region, while the 200-day SMA near $4,307 forms a deeper structural floor if sellers regain control.