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Gold languishes near two-week low as USD hits 13-month top on Fed hike bets

  • Gold attracts some follow-through selling as rising Fed rate hike bets continue to boost the USD.
  • Easing inflationary concerns fail to impress bullish traders or lend any support to the commodity.
  • The bearish technical setup backs the case for further losses as the focus shifts to the US PCE data.

Gold (XAU/USD) maintains its offered tone below the $4,100 mark through the first half of the European session, within striking distance of a nearly two-week low touched earlier this Wednesday. This marks the second straight day of a negative bias – also the fifth day in the previous six – and is sponsored by hawkish Federal Reserve (Fed)-inspired US Dollar (USD) buying interest. Despite easing inflationary concerns amid the recent fall in Crude Oil prices, traders have been pricing in a greater chance of a rate hike by the Fed. This, in turn, pushes the USD to a fresh high since May 2025 and keeps the non-yielding bullion close to the year-to-date low, touched earlier this month.

Crude Oil prices have fallen significantly over the past month or so and touched a fresh low since early March this Wednesday amid the resumption of traffic through the Strait of Hormuz. In fact, an Iranian military source told Fars news agency that a limited number of vessels are being allowed to pass through the strait each day under coordination with Iran’s Revolutionary Guards Navy. Furthermore, the US Treasury Department issued a temporary 60-day sanctions waiver that authorizes the production, delivery, and sale of Iranian crude oil, petroleum, and petrochemical products. This eases global supply concerns and continues to weigh on Oil prices, helping alleviate upstream pressure on consumer inflation.

Nevertheless, investors have significantly upped their bets that the US central bank will raise borrowing costs by at least 25 basis points (bps) in 2026 following the Fed's hawkish signal last week. Nine of the Fed's 19 committee members believed that they would need to raise the policy rate to combat inflation. Adding to this, the new Fed Chair, Kevin Warsh, focused strongly on price stability during the post-meeting press conference, suggesting that the central bank might not rush to cut interest rates even in the face of declining growth. Moreover, mixed US-Iran messages on Tehran's nuclear issues act as a tailwind for the Greenback, which is seen as another factor exerting downward pressure on the Gold price.

US Vice President JD Vance said on Monday that peace talks in Switzerland had resulted in Iran agreeing to invite inspectors from the International Atomic Energy Agency (IAEA) to its nuclear facilities. Moreover, US President Donald Trump said that Iran had "fully and completely" agreed to the highest level of nuclear inspections long into the future. However, Iran's state media, citing the foreign ministry, reported that Tehran had made no new commitments on nuclear inspections. This keeps geopolitical risk premiums in play, favoring the USD bulls and backing the case for deeper losses for the Gold. Traders now look to the US Personal Consumption Expenditures (PCE) Price Index, due on Thursday, for a fresh impetus.

XAU/USD 4-hour chart

Chart Analysis XAU/USD

Gold remains vulnerable amid bearish technical setup

Against the backdrop of the recent repeated failures near the 100-period Simple Moving Average (SMA) on the 4-hour chart, a convincing break and acceptance below the $4,100 mark could be seen as a fresh trigger for the XAU/USD bears. Moreover, momentum indicators are weak, with the Relative Strength Index (RSI) hovering near oversold territory around 31, while the Moving Average Convergence Divergence (MACD) stays in negative territory with a declining line. This, in turn, suggests that downside risks remain dominant even if occasional short-covering bounces emerge and backs the case for a decline toward retesting the year-to-date low, around the $4,024-$4,023 area, touched earlier this month.

On the topside, the 100-period SMA at $4,287.33 is the first meaningful resistance, and a sustained recovery above this barrier would be needed to ease the prevailing bearish bias and open the door to a more constructive consolidation phase. Until then, any approach toward the $4,280-$4,290 region is likely to be treated as an opportunity to re-establish selling interest while momentum signals fail to show a durable bullish reversal.

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

US Dollar Price Last 7 Days

The table below shows the percentage change of US Dollar (USD) against listed major currencies last 7 days. US Dollar was the strongest against the New Zealand Dollar.

USDEURGBPJPYCADAUDNZDCHF
USD2.27%1.85%0.91%1.67%2.46%3.28%2.34%
EUR-2.27%-0.42%-1.50%-0.60%0.20%0.97%0.07%
GBP-1.85%0.42%-1.02%-0.17%0.63%1.42%0.48%
JPY-0.91%1.50%1.02%0.89%1.66%2.50%1.54%
CAD-1.67%0.60%0.17%-0.89%0.79%1.59%0.65%
AUD-2.46%-0.20%-0.63%-1.66%-0.79%0.79%-0.13%
NZD-3.28%-0.97%-1.42%-2.50%-1.59%-0.79%-0.93%
CHF-2.34%-0.07%-0.48%-1.54%-0.65%0.13%0.93%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).

Author

Haresh Menghani

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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