Gold trades flat after Fed rate hike expectations increase

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Gold up 0.38% today near $4,438

Highlights

Federal Reserve Chair Kevin Warsh's remarks at Jackson Hole have revived expectations of a near-term U.S. interest rate hike, increasing the opportunity cost of holding gold.
Conflict between the U.S. and Iran in the Strait of Hormuz is driving inflation concerns and adding to market volatility, leading some investors to seek safe-haven assets.
Gold trades below key moving averages with technical indicators signaling persistent selling momentum; the expected range for the coming days is $4,316 to $4,560, with a higher probability of downside movement.

Fed hike signals and conflict elevate risk recalibration, sway gold flows

Federal Reserve Chair Kevin Warsh's remarks at the Jackson Hole Symposium have revived expectations of an imminent U.S. interest rate hike, increasing the opportunity cost of holding non-yielding assets such as gold and weighing on investor demand, according to News Tunisia Tunisienumerique. As monetary conditions appear set to tighten, traders are recalibrating their risk exposure, which typically leads to reduced appetite for commodities like gold. At the same time, ongoing military conflict between the U.S. and Iran in the Strait of Hormuz has contributed to heightened inflation fears and added to overall market volatility, prompting some investors to seek refuge in safe-haven assets.

Bearish momentum as XAU trades under key moving averages

On the technical front, XAU trades below the MA-20 and MA-50 on the H4 chart and remains under the MA-200 level on the daily timeframe. Immediate resistance is marked by the Ichimoku Kijun at $4,544, while a support zone is established near $4,316. Momentum indicators confirm seller dominance: MACD and ADX both reflect continued selling momentum, RSI is positioned at 30.3 (Sell), and Stochastic RSI, CCI, and Bull/Bear Power all report oversold conditions, with Awesome Oscillator readings supporting the prevailing downtrend.

Downside bias persists as consolidation range caps upside

For the coming several sessions, price action is likely to consolidate within a typical volatility band from $4,316 to $4,560. Current technical readings assign a 38% probability to an upside move, while a downward scenario remains more likely. The baseline expectation is for gold to hold within this corridor; a bullish breakout would require a move above immediate resistance, whereas a sustained close beneath range support would raise the likelihood of renewed declines.

Anton Kharitonov, analyst at Traders Union, sees current gold price action as weighed down by renewed Fed rate hike expectations and persistent technical weakness. Downside risk is magnified as momentum and trend indicators point clearly to seller dominance, despite mild defensive inflows from geopolitical tensions. He remains defensive until a decisive break of the $4,544 resistance. "Base case is consolidation below $4,560 — as long as gold stays under key averages and resistance, rallies look fragile to me."

Earlier, analysts noted that escalating government debt costs and persistent inflation risks had reinforced the appeal of hard assets such as gold as potential defensive holdings. The current technical setup suggests that while upward momentum remains challenged, traders should closely monitor the $4,316 support level as a decisive breakdown there could increase downside risk in the near term.

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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