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Gold prices (XAU/USD) declined 0.7% to $4,030 during European trading hours on Thursday, pressured by persistent global inflation concerns and elevated energy prices amid escalating tensions between the US and Iran. The 20-day exponential moving average (EMA) remains a critical technical level, with the current price below this key support. Analysts suggest further downside risks if the $3,940 level is breached, which could trigger renewed selling pressure.
The bearish outlook is driven by technical indicators and geopolitical factors. The EMA crossover below the 20-day line signals weakening momentum, while geopolitical instability in the Middle East adds to market volatility. Traders are closely monitoring energy prices and central bank policies, as these factors could amplify gold's downward trajectory.
For investors, the key focus is on the $3,940 support level and the 20-day EMA as potential turning points. Broader economic data, including inflation reports and US-Iran developments, will shape near-term price action. Market participants should also watch for shifts in the dollar's strength, which often inversely affects gold.
