Gold declines: Fed policy and geopolitics weigh

Gold prices fell below 4,000 USD per troy ounce on Tuesday, reaching their lowest level in nearly eight months. The precious metal remains under pressure amid expectations of further Federal Reserve tightening and ongoing uncertainty over the Middle East situation.

Since the start of June, gold has lost more than 12%, with quarterly losses estimated at approximately 15%. Markets continue to price in three Fed rate hikes for the remainder of the year, with the first potentially coming in September.

Investors are now turning their attention to the upcoming US labour market report, which could shape expectations for the Fed's next policy steps.

An additional layer of uncertainty comes from US–Iran negotiations, which are set to resume today in Doha. Despite ongoing diplomatic contacts, the prospects for a long-term settlement remain limited, with control over shipping in the Strait of Hormuz remaining a key sticking point.

Technical analysis

On the H4 XAU/USD chart, the market is trading within a consolidation range around the 4,017 USD level and has declined to 3,940 USD. A corrective move towards 4,016 USD (a test from below) is expected, followed by a potential decline to 3,885 USD, with scope for a further move to 3,810 USD. The MACD indicator confirms the current downside momentum, with its signal line below the centre line and pointing firmly downwards.

On the H1 chart, the market broke below the 4,017 USD level and moved lower to 3,940 USD. A corrective rebound towards 4,016 USD (a test from below) may follow before a further decline to 3,885 USD, with scope for an extension to 3,810 USD. The Stochastic oscillator supports this scenario, with its signal line below 50 and pointing downwards towards 20, indicating continued downside pressure.

Conclusion

Gold has fallen below 4,000 USD for the first time in nearly eight months, extending its losses amid expectations of further Fed tightening and persistent geopolitical uncertainty. Markets are pricing in three rate hikes for the rest of the year, with the first likely in September, while US–Iran negotiations in Doha offer limited prospects for a breakthrough given deep disagreements over shipping control in the Strait of Hormuz. Gold has now lost more than 12% since the start of June, with quarterly losses approaching 15%. Technical indicators point lower, suggesting further downside towards 3,885 USD and potentially 3,810 USD in the near term.