Gold eyes multi-week low, deeper losses as bears retain control ahead of Fed rate decision
- Gold remains under some selling pressure for the third straight day as the US-Iran stalemate underpin the USD.
- Elevated Oil prices revive inflation fears and revive hawkish Fed bets, further exerting pressure on the commodity.
- The technical setup favors the XAU/USD bears and backs the case for deeper losses ahead of the Fed decision.
Gold (XAU/USD) attracts sellers for the third consecutive day on Wednesday and slides back closer to a three-week trough during the first half of the European session. The uncertainty over the second round of US-Iran peace talks continues to underpin the US Dollar's (USD) reserve currency status and undermine the commodity. Hopes for diplomatic efforts to end the Iran war receded over the weekend after US President Donald Trump canceled his special envoy's planned visit to Pakistan. Furthermore, media reports suggest that Trump is dissatisfied with Iran's new proposal on ending the conflict and reopening the Strait of Hormuz, while setting aside discussions on the nuclear program.
Meanwhile, shipping traffic through the strategic waterway has recently seen a sharp decline due to Iran's restrictions on movements and the US naval blockade of Iranian ports. This, along with the US-Iran stalemate, remains supportive of elevated Crude Oil prices and revives inflationary concerns. This might prompt major central banks, including the US Federal Reserve (Fed), to adopt a more hawkish stance, which turns out to be another factor driving flows away from the non-yielding Gold. The XAU/USD bears, however, might refrain from placing aggressive bets and opt to wait on the sidelines ahead of the highly anticipated FOMC policy update, due later during the US session this Wednesday.
The key focus will be on the post-meeting press conference, where comments from the outgoing US Federal Reserve (Fed) Chair Jerome Powell will be scrutinized for cues about the future policy path. The outlook, in turn, will play a key role in influencing the near-term US Dollar (USD) price dynamics and provide some meaningful impetus to the Gold price. The aforementioned fundamental backdrop, meanwhile, suggests that the path of least resistance for the XAU/USD remains to the downside, backing the case for a further depreciating move.
Hence, any attempted recovery move might still be seen as an opportunity for bearish traders and runs the risk of fizzling out rather quickly.
XAU/USD 1-hour chart
Gold could accelerate the fall below overnight swing low, near $4,555-$4,554
Against the backdrop of the recent failure near the 200-hour Exponential Moving Average (EMA), the overnight break below the $4,670-4,665 horizontal support was seen as a key trigger for the XAU/USD bears. Moreover, the Relative Strength Index (RSI) around 40 reflects subdued buying pressure, suggesting that any attempted recovery remains vulnerable while the Gold is capped beneath these overhead levels.
That said, the Moving Average Convergence Divergence (MACD) histogram has turned positive, hinting at a modest recovery attempt. Meanwhile, initial resistance is seen at the horizontal line near $4,668.04, with the 200-period EMA at about $4,703.69 acting as the next, more substantial obstacle that would need to be reclaimed to ease the prevailing bearish pressure. On the downside, weakness below the overnight swing low, around the $4,555, would leave the precious metal exposed to further slippage.
(The technical analysis of this story was written with the help of an AI tool.)
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.09% | 0.11% | 0.06% | -0.01% | 0.29% | 0.35% | -0.00% | |
| EUR | -0.09% | 0.00% | -0.02% | -0.11% | 0.20% | 0.27% | -0.10% | |
| GBP | -0.11% | -0.01% | -0.04% | -0.13% | 0.17% | 0.27% | -0.12% | |
| JPY | -0.06% | 0.02% | 0.04% | -0.09% | 0.23% | 0.31% | -0.02% | |
| CAD | 0.01% | 0.11% | 0.13% | 0.09% | 0.33% | 0.38% | 0.01% | |
| AUD | -0.29% | -0.20% | -0.17% | -0.23% | -0.33% | 0.07% | -0.33% | |
| NZD | -0.35% | -0.27% | -0.27% | -0.31% | -0.38% | -0.07% | -0.37% | |
| CHF | 0.00% | 0.10% | 0.12% | 0.02% | -0.01% | 0.33% | 0.37% |
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
FXStreet
Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.
