Gold prices remained under selling pressure during the Asian trading session, with XAU/USD trading near the $4,465 level and staying close to its weekly low. Rising geopolitical tensions in the Middle East and growing expectations that the Federal Reserve will keep interest rates higher for longer continue to weigh on the non-yielding precious metal.
Crude oil prices extended gains for a third consecutive session amid escalating hostilities in the Middle East, reigniting inflation concerns across global markets. The renewed inflation fears have strengthened speculation that major central banks, including the US Federal Reserve, could maintain a hawkish monetary policy stance for an extended period.
From a technical perspective, XAU/USD continues to trade within a bearish descending channel and below the 200-period Exponential Moving Average (EMA) on the 4-hour chart. The Relative Strength Index (RSI) remains near 46, signaling slightly negative momentum without entering oversold territory. Meanwhile, the Moving Average Convergence Divergence (MACD) indicator has slipped back below the zero line, highlighting fading recovery momentum within the broader downtrend structure.
The current technical setup suggests that any recovery attempt may face immediate resistance near the 200-period EMA around $4,598.83. Additional resistance is seen near the upper boundary of the descending channel at approximately $4,634.83. A decisive breakout above these levels would be needed to ease the current bearish sentiment.
On the downside, the lower boundary of the descending channel near $4,322.55 serves as the next major support level. A clear break below this zone could strengthen the ongoing bearish trend and trigger deeper losses for gold prices.
Geopolitical uncertainty has also helped the US Dollar maintain weekly gains, further pressuring gold prices. In the latest Middle East developments, the US Central Command (CENTCOM) confirmed conducting a “self-defense” strike on Iran’s Qeshm Island. In response, Iran reportedly launched missiles and drones targeting US military facilities in Kuwait and Bahrain, although most attacks were intercepted by US and Gulf air defense systems.
At the same time, tensions between Israel and Hezbollah have intensified, while diplomatic negotiations between the US and Iran remain stalled over Tehran’s nuclear program and the Strait of Hormuz. The lack of progress in negotiations has increased fears of further escalation in the region and kept geopolitical risks elevated.
US Secretary of State Marco Rubio stated that Washington would not lift sanctions on Iran in exchange for reopening the Strait of Hormuz, emphasizing that sanctions relief depends on Iran surrendering its enriched uranium. Meanwhile, US President Donald Trump announced an indefinite extension of the ceasefire alongside the continuation of the US blockade until negotiations are resolved.
These developments have supported crude oil prices, pushing them further away from last week’s one-month lows and intensifying inflation concerns. Investors now expect central banks to maintain tighter monetary policies, adding pressure on gold markets.
Adding to the hawkish outlook, Cleveland Fed President Beth Hammack reiterated that the Federal Reserve remains strongly committed to bringing inflation back to its 2% target and may need to act quickly if inflation pressures persist. According to CME Group’s FedWatch Tool, traders are now pricing in more than a 50% probability of a 25-basis-point Fed rate hike during the December policy meeting.
Higher US Treasury yields and a stronger US Dollar continue to reduce the appeal of gold, contributing to the weaker sentiment surrounding the precious metal market.