Gold Price Forecast: XAU/USD slides below 20-day EMA as Israel-Iran call ceasefire

• Gold price is down over 1% to near $3,320 as the Israel-Iran ceasefire diminishes safe-haven demand.
• Fed Bowman supports interest rate cut in July amid growing labor market risks.
• The US Dollar sumps on Israel-Iran ceasefire and Fed Bowman's dovish commentary.

Gold price (XAU/USD) plummets to near $3,320 during the European trading session on Tuesday. The yellow metal faces a sharp selling pressure as safe-haven assets are underperforming after the announcement of a ceasefire between Israel and Iran.

United States (US) President Donald Trump has stated in a post on Truth.Social that the two Middle East nations have agreed to stopping the 12-day long aerial war. "The ceasefire is now in effect. Please do not violate it!" Trump wrote.

Meanwhile, Israeli Prime Minister Benjamin Netanyahu has warned its defence forces will respond forcefully if Iran violates the truce.

However, investors expect the Gold price to get supported by a dramatic change in the Federal Reserve's (Fed) stance on the monetary policy outlook. Fed Vice Chair Michelle Bowman stated in a gathering in Prague on Monday that monetary policy adjustments are becoming appropriate amid growing job market risks and expectations that the tariff policy announced by Donald Trump will have limited impact on inflation.

Should inflation pressures remain contained, I [Michelle] would support lowering the policy rate as soon as our next meeting in order to bring it closer to its neutral setting and to sustain a healthy labor market," Bowman said.

Lower interest rates by the Fed bodes well for non-yielding assets, such as Gold. Meanwhile, Fed's dovish stance on the monetary policy outlook and easing geopolitical tensions have weighed heavily on the US Dollar (USD).

Gold technical analysis

Gold price trades in an Ascending Triangle formation on a daily timeframe, which indicates volatility contraction. The horizontal resistance of the above-mentioned chart pattern is plotted from the April 22 high around $3,500, while the upward-sloping trendline is placed from the April 7 low of $2,957.

The precious metal slides below the 20-day Exponential Moving Average (EMA), suggesting that the near-term trend has become uncertain.

The 14-day Relative Strength Index (RSI) drops below 50.00, indicating that the momentum has shifted to the downside.

Looking up, the Gold price would enter in an unchartered territory after breaking above the psychological level of $3,500 decisively. Potential resistances would be $3,550 and $3,600.

Alternatively, a downside move by the Gold price below the May 29 low of $3,245 would drag it towards the round-level support of $3,200, followed by the May 15 low at $3,121.

Gold daily chart