$4,000 under siege: Buyers losing the battle on Gold

XAU/USD Current price: $4,062

• The United States Producer Price Index rose by less than anticipated in June.
• Fed Chair Kevin Warsh testified before Congress, focus remains on inflation.
• XAU/USD is neutral-to-bearish, dangerously close to the $4,000 barrier.

The US Dollar (USD) is under strong selling pressure on Wednesday, yet action around XAU/USD is muted. The Greenback found near-term demand at the beginning of the day, but changed direction following the release of the United States (US) Producer Price Index (PPI), which printed at 5.5% on a yearly basis in June, down from 6% in May. The reading came in below the market expectation of 6.6%. On a monthly basis, the PPI was down 0.3%.

The USD kept falling afterward, following comments from Federal Reserve (Fed) Chair Kevin Warsh. Warsh testified for a second consecutive day before Congress and maintained the focus on inflation as he said that current price pressures will not be permanent, while acknowledging that the latest inflation measures remain unsatisfactory.

Meanwhile, Middle East tensions ramped up. The US conducted a military attack on Iran to take out coastal military installations, and tit-for-tat attacks in the region continue, although a Senior US official reported that talks between all parts have concluded, adding that discussions were “fruitful and positive.” Oil prices remain stable, meaning market players cling to hopes the situation won’t escalate further.

XAU/USD short-term technical outlook

The four-hour chart shows XAU/USD retains a mildly bearish bias as it sits below the 100-period Simple Moving Average (SMA) at $4,073.52 and well under the 200-period SMA at $4,188.21. The metal nevertheless holds above the 20-period SMA at $4,048.14, hinting at near-term consolidation rather than a decisive breakdown. The Relative Strength Index (RSI) indicator aims marginally higher, around 51, while the Momentum indicator has turned slightly positive within neutral levels, suggesting downside pressure is easing but not yet reversed.

In the daily chart, XAU/USD is more clearly bearish, as price holds beneath the short- and long-term moving averages. Spot gold is trading below the 20-day SMA at $4,092.16, while the 200-day SMA at $4,495.71 and the 100-day SMA at $4,559.53 remain well above, hinting at a market that stays capped within a broader corrective phase. The Momentum turns lower around its midline, while the RSI indicator stands near 42, suggesting subdued buying interest.

On the topside, immediate resistance is seen at the 100-period SMA at $4,073.52, followed by the $4,100 area, with a stronger cap at the 200-period SMA near $4,188.21, where a sustained break would be needed to reassert a bullish trend. On the downside, initial support is provided by the 20-period SMA at $4,048.14 ahead of the $4,000 mark. Below the latter, a recent low at $3,941 is the next level to watch.

(The technical analysis of this story was written with the help of an AI tool. Know more.)