On Thursday, during the European trading session, spot gold prices were moving within a narrow range. The latest price was reported at $4,097.90 per ounce, representing an increase of 0.56%. The precious metal opened at $4,076.09 per ounce, reaching an intraday high of $4,089.31 and a low of $4,053.87.

Chief Analyst Valeria Bednarik of FXStreet provided a technical analysis of gold's outlook. Bednarik noted that renewed escalation in Middle East tensions is applying fresh pressure to precious metal prices. The price of gold touched a weekly low of $4,021 per ounce on Wednesday. The current risk for gold's price movement remains skewed to the downside.

Spot gold prices closed lower on Wednesday. Following remarks by former U.S. President Trump that a temporary ceasefire agreement with Iran had ended, oil prices surged, reigniting concerns about rising inflation. This development subsequently weighed on non-yielding gold.

Spot gold concluded Wednesday's session down by $28.37, or 0.69%, at $4,077.34 per ounce. During the session, the price fell to a low of $4,021.62, marking its lowest level since July 1st.

Tensions in the Middle East have intensified once more. The United States launched an attack in retaliation for Iran's offensive against commercial vessels transiting the Strait of Hormuz. According to a report from Iran's state broadcaster IRIB, Iran's Islamic Revolutionary Guard Corps (IRGC) targeted U.S. military facilities in Bahrain and Kuwait in retaliation for the American airstrikes.

The renewed flare-up in tensions has driven up both oil prices and the U.S. dollar. Rising oil prices typically fuel inflation, potentially compelling central banks to curb price pressures through interest rate hikes. While gold is traditionally viewed as a hedge against inflation, its appeal as an investment diminishes in a high-interest-rate environment due to its non-yielding nature.

From a technical perspective, Bednarik pointed out that on the 4-hour chart, gold's short-term trend appears bearish, with the current price trading below its main moving averages. The 100-period Simple Moving Average (SMA) at $4,123.01, the 20-period SMA at $4,132.96, and the 200-period SMA at $4,255.50 are all positioned above the current price. The Relative Strength Index (RSI) has rebounded from its lows but remains around 43. The Momentum indicator shows a similar pattern, suggesting that buying pressure is waning following the recent pullback.

Bednarik indicated that on the daily chart, gold also exhibits a bearish trend. The spot gold price is below the 20-day SMA ($4,140.60) and remains significantly lower than the long-term 200-day SMA ($4,491.04) and the 100-day SMA ($4,610.76). The RSI reading of 40.84 is still below the midline, and the 14-day Momentum indicator is negative. Together, these signals suggest that while the downward pressure has eased compared to previous oversold extremes, it persists.

Bednarik added that on the upside, immediate resistance for gold lies near the 100-period SMA at $4,123.01, followed by short-term resistance around the 20-period SMA at $4,132.96. A stronger resistance level is situated near the 200-period SMA at $4,255.50. On the downside, the $4,000 per ounce level provides immediate support, followed by the recent multi-month low of $3,941.

Currently, spot gold prices are trading higher, provisionally quoted at $4,097.90 per ounce, up 0.56%, having reached a high of $4,089.31 and a low of $4,053.87. For today's session, support below is seen around $4,045 or $4,020, while resistance above is monitored near $4,100 or $4,120.