Gold falls after Federal Reserve hints at more rate hikes

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Gold slides 2.92% to $3,990 today

Highlights

Easing US-Iran tensions and the resumption of Hormuz oil shipments have eroded gold's safe haven demand.
Fed's hawkish stance, expected rate hikes, and dollar strength continue to pressure gold prices further.
Gold trades below major moving averages with strong bearish momentum; downside breakout below $3,884 is increasingly likely.

Safe haven demand recedes as US-Iran progress and hawkish Fed weigh

Progress toward a peace framework between the United States and Iran has lowered geopolitical risk, reducing demand for Gold as a safe haven, as reported by Tradebrains. The Federal Reserve's hawkish monetary policy stance and the expected continuation of rate hikes have further increased pressure on Gold holdings, according to Euronews. Persistent US dollar strength and the rise in global interest rates, as stated by Deccanherald, have accelerated the decline, while the return of oil shipments through the Strait of Hormuz after the US-Iran deal has diminished supply concerns and Gold's safe haven appeal, according to Fxstreet.

Sustained downtrend as deep oversold signals and resistance converge

Technically, price action remains below the MA-20 at $4,115 and MA-50 at $4,155, with a wide gap from the MA-200 at $4,644. The Ichimoku Kijun-sen at $4,125 serves as immediate resistance, while support sits at $3,884. Momentum indicators confirm a negative environment: the MACD and ADX highlight sustained selling, and the RSI at 29.7 signals oversold. Both the CCI and Stoch RSI indicate deep oversold territory, and BBP readings point to dominant intraday seller pressure; the Awesome Oscillator also supports a prevailing downtrend.

Sideways consolidation likely as breakout risk hinges on support

Over the next two to three trading days, price action for Gold is expected to remain confined to a $3,884 to $4,096 corridor, reflecting the current volatility band relative to prevailing levels. The probability for any upward move is very low, with the baseline scenario favoring further sideways consolidation within this range. A clear breakout above $4,125 resistance would be needed for a sustainable bullish reversal, while another decisive move lower could be triggered if support at $3,884 fails.

Anton Kharitonov, expert at Traders Union, sees the current gold setup as technically weak and sentiment-driven to the downside. He believes the decisive shift in geopolitical risk and continued hawkish Fed policy remove key supports for gold in the near term. As long as price trades below $4,125 and macro pressures remain in force, he cannot trust any rebound. "My base case is for further sideways consolidation or potential weakness as long as gold stays below major resistance and safe haven inflows remain subdued."

Earlier, analysts noted that persistent selling pressure and diminished geopolitical risk reinforced a bearish outlook for gold, with downside risks continuing to outweigh the potential for recovery. The current environment, marked by renewed dollar strength and reduced safe haven demand following the US-Iran agreement, further entrenches this negative bias, making $3,884 a pivotal support level to monitor for any potential breakdown in the coming sessions.

Source of Data: XAU Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

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