Gold Price Forecast: U.S.-Iran Tensions Ease, Nonfarm Payrolls Looming, What’s Next for Gold?
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Gold prices rebounded sharply, exceeding $4,700, driven by easing U.S.-Iran tensions, falling oil prices, a weaker dollar, and lower Treasury yields. Key resistance is now at $4,800, with a decisive break potentially leading to $5,000. Institutions remain bullish, forecasting up to $5,200 by year-end 2026. Future price action hinges on U.S. non-farm payrolls data, with strong figures pressuring gold and weak data supporting further gains. Short-term strategies suggest buying on dips.
TradingKey - Gold prices ( XAUUSD) After retesting the $4,500 level this Monday, gold prices staged a strong rebound of more than $200 during the Tuesday and Wednesday sessions, reclaiming the $4,700 mark. As of press time, gold prices maintain their upward momentum today (May 7), trading at $4,736.77. Moving forward, the $4,800 level will be a key threshold to watch for gold price trends.
U.S.-Iran tensions ease as markets shift focus to non-farm payrolls data
From a fundamental perspective, the core driver behind this strong rebound in gold prices remains the easing of tensions between the U.S. and Iran.
Donald Trump's remarks regarding a potentially swift end to the conflict and reports that Iran is reviewing a U.S.-proposed peace plan have simultaneously entered the market's view. However, the core disagreements within the agreement have not entirely vanished, and the U.S. position on Iran's nuclear program remains unresolved.
As tensions between the U.S. and Iran eased, oil prices plunged in response. WTI Oil prices fell below the $90 mark this Wednesday (May 6), hitting a low of $88.66 with a maximum decline of 15.5%; meanwhile, Brent crude once again dropped below the $100 psychological level, touching a low of $95.44. The slump in oil prices alleviated market concerns over U.S. inflation expectations, which in turn supported the continuous upward movement of gold prices.
WTI oil price daily chart, Source: TradingView
Meanwhile, this rally in gold prices occurred against the backdrop of a retreating U.S. dollar and lower U.S. Treasury yields. The dollar hovered near three-month lows, reducing the cost of dollar-denominated gold for overseas buyers, while the pullback in yields also lowered the opportunity cost of holding gold.
As the market gradually priced in the easing of U.S.-Iran tensions, focus shifted to the non-farm payrolls data scheduled for release this Friday.
Wednesday's ADP private employment data came in at 109,000, exceeding the expected 99,000, indicating that the U.S. labor market has not significantly stalled. If Friday's non-farm payrolls continue to show strength, expectations for rate cuts will likely be pushed further back, putting short-term pressure on gold; conversely, if the non-farm data show signs of weakness in the U.S. labor market, it will support a continued rise in gold prices.
Institutions remain generally bullish on gold's outlook; prices may reach $5,200 by year-end.
From an institutional standpoint, the market remains broadly bullish on the outlook for gold. According to a Reuters survey, the average gold price forecast for 2026 from 31 analysts has been revised upward to $4,916, continuing its climb from $4,746.5 three months ago. This suggests that mainstream institutional medium-term pricing for gold remains robust, underpinned by global uncertainty, central bank purchases, and asset allocation demand.
At the same time, Morgan Stanley noted that gold showed signs of its safe-haven status faltering amid the Iranian conflict, as energy shocks heightened inflation expectations and dampened market anticipation for an immediate Fed rate cut. However, as tensions between the U.S. and Iran de-escalate, the firm continues to maintain its forecast of $5,200 for gold by the end of 2026.
ING analysts Warren Patterson and Ewa Manthey believe that as long as U.S.-Iran tensions continue to ease, gold will be supported for a sustained short-term rally; however, its future trajectory remains contingent on Federal Reserve monetary policy and upcoming U.S. economic and employment data.
Technical Analysis: The $4,800 level warrants special attention.
Gold price daily chart, source: TradingView
Based on the daily chart of gold, prices retested the key $4,500 support level this Monday and failed to break below it, indicating strong support at this position. Subsequently, gold began a robust technical recovery rally. As of today's European session, gold has risen for three consecutive trading days, with a cumulative gain of over $200. (The $4,500 support level was highlighted in the April 29th article " $4,500 becomes the life-and-death line for gold bulls; will gold prices continue to fall this week? ")
Currently, the primary resistance level to watch for gold's upside is $4,800.25. If gold fails to break through this level decisively and shows weakness with bearish closes below it, the candlestick structure on the daily chart may form a head-and-shoulders top pattern, significantly strengthening short-term bearish momentum. Conversely, if it breaks above this level decisively, gold will open up upside potential toward $4,900, with the possibility of even reaching the $5,000 psychological level.
For short-term operations, it is recommended to use the MA10 and MA20 on the 4-hour and 1-hour charts as support, focusing primarily on buying on dips.
Support levels: 4700, 4660
Resistance levels: 4800, 4889
This content was translated using AI and reviewed for clarity. It is for informational purposes only.
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