Gold Price Forecast: XAU/USD keeps looking for direction above $4,500

• Gold hovers above $4,500, halfway through the weekly trading range.

• Investors await more clarity from the US-Iran peace negotiations.

• XAU/USD is forming a small triangle pattern with a bearish outcome favoured.

Gold (XAU/USD) trades lower for the second consecutive day on Friday, but remains contained within previous ranges, with downside attempts limited above the $4,500 line for now. Market volatility remains subdued on Friday, with traders awaiting developments from the US-Iran war to make investment decisions.

The confusing situation in the Middle East is providing moderate support to the safe-haven US Dollar, keeping the US Dollar Index (DXY) steady near six-week highs and Gold bulls in check.

The latest news reports that Tehran is reviewing a peace proposal submitted by the US, with both parties far apart on Iran’s nuclear activities and control of the Strait of Hormuz. US Secretary of State Marco Rubio, however, said on Thursday that there was  “some progress” in the talks with Tehran, which is feeding a moderate optimism

Technical Analysis: Gold is nearing the tip of a triangle pattern

XAU/USD trades at $4,522, holding a capped tone, with price action nearing the tip of a small triangle pattern. The Relative Strength Index (RSI) hovers around 45, hinting at consolidative, yet slightly negative momentum, while the Moving Average Convergence Divergence (MACD) stays in positive territory but has started to ease, suggesting that recent upside attempts are losing traction

Triangles are considered continuation patterns; thus, in this case, a bearish outcome is favoured. The base of the triangle is now at $4,500, but the key support area is the May 20 low near $4,450. A break of this level exposes late March lows at $4,350 and $4,306.

A confirmation above $4,580 (May 18 highs), on the other hand, would negate the bearish view and shift to the May 11 and 12 lows around the $4,650 ahead of May's top in the $4,770 area.