XAU/USD extends its struggle with $4,400, but bullish bias intact

• Gold builds on Friday’s recovery from near $4,300, retakes $4,400 early Monday.
• US Dollar meets fresh supply as fading Fed rate hike bets offset fresh Middle East tensions.
• Gold’s daily technical setup remains bullish, following a Bull Cross confirmation.

Gold is holding the previous recovery from near $4,300 on early Monday, struggling around the key $4,400 level. However, buyers retain control as the new week kicks in, with all eyes on the Middle East updates and the Minutes of the US Federal Reserve (Fed) July monetary policy meeting.

Gold is capitalizing on renewed US Dollar (USD) weakness as markets keep slashing bets on a potential Fed interest rate hike in September, following cooling inflation and retail spending in the United States (US) as well as a dip in consumer sentiment.

The University of Michigan’s (UoM) Surveys of Consumers said on Friday that its Consumer Sentiment Index dropped to 51.0 in August from 55.2 in July, ending two straight months of improvement. ​The market forecast was for 54.5.

Markets are currently pricing in just a 30% chance that the Fed will raise rates next month, down from roughly 50% seen a week ago, according to the CME Group’s FedWatch Tool.

Less hawkish Fed expectations counter looming uncertainty over the US-Iran peace deal and the reopening of the Strait of Hormuz, leaving the Greenback on the back foot as Gold buyers look to extend their control.

However, Oil prices appear to have caught a fresh bid on the latest news that Israel resumed airstrikes against Lebanon in the past few days, likely violating the ceasefire, as US President Donald Trump said on Friday that Washington plans to hit Iran’s economy hard with sanctions.

Therefore, it remains to be seen if Gold retains the upper hand should the Gulf war re-escalate and revive the Oil price uptrend and inflation concerns.

That being said, any dip in Gold is likely to be bought as its daily technical setup remains constructive.

In the daily chart, XAU/USD trades at $4,391.42, holding a constructive bullish bias as spot remains above the 21-day and 50-day simple moving averages (SMAs) while hovering just over the 100-day SMA at $4,385.88. This configuration suggests the recent advance is still supported by the broader trend, though the proximity of price to the 100-day SMA hints at a market pausing to reassess upside momentum. The Relative Strength Index (14) at 64.26 stays below overbought territory, indicating firm but not yet excessive buying pressure.

On the topside, initial resistance emerges at the 200-day SMA, now aligned near $4,506.68, where a clear break would be needed to unlock a more decisive bullish extension. On the downside, immediate support is defined by the 100-day SMA at $4,385.88, with additional layers of demand seen at the 21-day SMA around $4,185.07 and the 50-day SMA near $4,147.70; a daily close below these latter averages would weaken the current positive tone and signal a deeper corrective phase.