Gold Holds Gains Above $4,300 as Cautious Markets Await Fed Decision
Gold prices maintained a mildly positive tone on Tuesday, holding onto gains after rallying approximately 6.5% over the past several days. However, the precious metal's recovery lost momentum after climbing above the $4,300 level, trading largely flat as early optimism surrounding the U.S.-Iran peace agreement faded and investors awaited further details on the deal as well as upcoming monetary policy decisions from major central banks.
On the daily chart, the short-term outlook for XAU/USD remains bearish as prices continue to trade below the Bollinger Bands midpoint and well beneath the 100-day Simple Moving Average (SMA), keeping the broader recovery structure constrained. The Relative Strength Index (RSI) is hovering around 43, remaining below the neutral 50 level and signaling persistent downside pressure despite recent stabilization efforts.
On the upside, immediate resistance is located at the June 9 high of $4,363. The next key hurdle is the Bollinger Bands midpoint near $4,415. Beyond that, the upper Bollinger Band around $4,685 and the 100-day SMA near $4,762 form a broader supply zone should the rebound extend further.
On the downside, the lower Bollinger Band near $4,145 serves as the next critical support level. A decisive break below this area could expose gold to deeper losses toward previous swing lows.
Markets Digest U.S.-Iran Peace Framework
According to Bloomberg, U.S. President Donald Trump and Vice President JD Vance signed an electronic memorandum of understanding with Iran on Monday. Trump stated that the Strait of Hormuz has already been “partially reopened” and is expected to be “fully reopened” by Friday.
“The gold market is moving beyond the conflict and removing it from pricing,” said Phillip Streible, Chief Market Strategist at Blue Line Futures. “The peace deal news has pushed Treasury yields, the U.S. dollar, and oil prices lower, reducing one of the market’s biggest inflation and cross-asset risks.”
Despite the positive headlines, caution remains elevated as both sides continue to provide differing accounts on key issues. Iran reportedly intends to collect certain fees for passage through the strategically important waterway, while Trump has insisted the Strait will be fully reopened by Friday without toll charges.
Trump also warned on Monday that if Iran fails to finalize a nuclear agreement with the United States, military operations against Tehran could resume.
Fed Rate Decision in Focus
Expectations for additional Federal Reserve rate hikes eased following the peace framework announcement, providing support for gold, a non-yielding asset that tends to benefit from lower interest rate expectations.
According to the CME FedWatch Tool, traders reduced the probability of a December rate hike to 58%, down from nearly 70% last week.
The Federal Reserve is scheduled to announce its latest monetary policy decision on Wednesday. Economists widely expect the U.S. central bank to leave its benchmark interest rate unchanged within the 3.50%–3.75% range while assessing how energy-price shocks from recent geopolitical tensions may affect broader inflation trends and economic growth.
XAU/USD Technical Outlook
While gold remains supported above the $4,300 level, the broader technical picture continues to favor caution. Traders are likely to remain focused on Federal Reserve guidance, geopolitical developments, and key support and resistance levels as the market searches for its next directional catalyst.