Gold Price Forecast: XAU/USD nears the tip of a triangle formation at the $4,000 area

Gold (XAU/USD) shows marginal gains on Monday, as the US Dollar recovery stalled and Oil prices pulled back from highs. The precious metal remains capped below a descending trendline resistance, but downside attempts remain supported above the $3,965 area, thus forming a descending triangle pattern

Simmering tensions in the Middle East keep Gold rallies subdued, but recent comments from Iran’s Foreign Ministry Esmaeil Baghaei, suggesting that efforts to de-escalate the conflict are going on, have provided a glimpse of hope on Monday. Risk appetite added some pressure on the US Dollar and pulled Oil prices down from one-month highs, which is good news for Gold.

The US Dollar also remains weighed by the softer-than-expected US inflation figures released last week, which have prompted investors to dial down expectations of any Federal Reserve monetary tightening in the coming months.

Technical Analysis: Triangle formation and bullish divergence

XAU/USD trades at $4,021, with the bearish structure in play, yet with a triangle formation and some bullish divergence in the Relative Strength Index (RSI), suggesting that bears might have run out of steam. The 4-hour RSI has recovered toward a neutral level while the Moving Average Convergence Divergence (MACD) has turned positive, hinting at building but still constrained buying interest.

Bulls, however, would have to break the top of the triangle, now around $4,050, to confirm a trend shift, aiming for the $4100 area (July 14 high) and the $4,210 area (July 6 high). A break below year-to date lows at $3,941 would expose the October 2025 low, at $3,886. Further down, the 127.2% Fibonacci extension of the late-June downleg, at the $3,830 area, emerges as the next target.