Gold Holds Above $4,100, but for How Long?
Gold prices remained under pressure on Tuesday morning after facing another rejection near the $4,200 level. The US Dollar continued to trade at its highest level in more than a year, supported by the Federal Reserve’s hawkish outlook and lingering skepticism over progress in US-Iran peace negotiations. As a result, gold appears vulnerable to further losses, with sellers targeting the key $4,100 support zone.
At the time of writing, XAU/USD was trading around $4,136.00, extending its bearish trend as spot prices remained below all major Simple Moving Averages (SMAs). The 21-day SMA at $4,328.42 serves as the first significant resistance level, while the 200-day and 50-day SMAs at $4,471.81 and $4,515.31 respectively reinforce the broader negative outlook.
Meanwhile, the Relative Strength Index (RSI 14) stands at 35.76, slightly above oversold territory. This suggests that bearish momentum remains intact, although the pace of selling pressure has begun to ease rather than accelerate.
On the upside, immediate resistance is located near the 21-day SMA at $4,328. A daily close above this level would help reduce near-term downside pressure and potentially pave the way toward the 200-day SMA around $4,472. A stronger bullish recovery would require gold to reclaim the 50-day SMA near $4,515, while the 100-day SMA around $4,709 remains a major long-term trend barrier.
With no significant SMA-based support levels below current prices, gold remains exposed to additional downside risks as long as it continues trading beneath these layered resistance zones.
Gold Sellers Remain Active Near $4,200
Gold bears continue to dominate market sentiment around the $4,200 area despite signs of progress in diplomatic efforts between the United States and Iran.
According to Reuters, US Vice President JD Vance stated that discussions with Iranian officials in Switzerland had established a solid foundation for a future peace agreement. However, Iran denied that negotiations regarding its nuclear program had begun, raising doubts about the durability of any diplomatic breakthrough.
At the same time, the ongoing closure of the Strait of Hormuz has increased investor caution. Market participants remain skeptical that peace negotiations will produce a lasting resolution, especially amid the possibility of renewed tensions and strong rhetoric from US President Donald Trump.
As uncertainty persists, investors have continued to seek safety in the US Dollar, pushing the Greenback to its strongest level in more than a year against a basket of major global currencies.
The US Dollar has also benefited from growing expectations that the Federal Reserve could raise interest rates later this year. According to the CME FedWatch Tool, markets are currently pricing in an 88% probability of a rate hike in December, up sharply from 61% before last week's Federal Reserve meeting.
The combination of a stronger US Dollar and increasingly hawkish Fed expectations continues to weigh heavily on non-yielding assets such as gold, increasing the likelihood of further downside pressure.
US PMI Data in Focus
Investors are now turning their attention to the release of preliminary US S&P Global Manufacturing and Services PMI data later today. Stronger-than-expected economic figures could reinforce expectations for tighter monetary policy and trigger another wave of selling in the gold market.
The Manufacturing PMI is expected to ease slightly to 54.7 in June from 55.1 in May, while the Services PMI is forecast to improve to 51.0 from 50.7 during the same period.
In addition to economic data, comments from Federal Reserve officials and developments surrounding US-Iran negotiations are expected to remain key drivers of market sentiment and gold price movements in the near term.