Gold Price Forecast: Mean-reversion move to 20-day EMA looks likely

LONDON (June 12) Gold price (XAU/USD) holds onto Thursday’s strong recovery move to near $4,220 during the European trading session on Friday. The precious metal reflects strength amid intensified hopes that the United States (US) and Iran will sign a Memorandum of Understanding (MoU) by the weekend.

A Bloomberg report has stated that the US and Iran will sign an MoU in the G7 Summit in Geneva by Sunday, a move that will lead to an immediate opening of the Strait of Hormuz, a vital passage to one-fifth of global energy supply.

The Gold price underperformed in the last few months, as oil prices rallied due to the Hormuz closure that led global inflation higher and forced traders to price out dovish expectations for global central banks.

Theoretically, easing dovish expectations for central banks bode poorly for non-yielding assets, such as Gold.

FXStreet