Gold Price Vulnerable Near $4,100 as Fed Rate Hike Bets and Iran Risks Pressure Bullion
Gold prices remained under pressure near the $4,100 level during the European session as investors weighed expectations for additional Federal Reserve rate hikes alongside renewed geopolitical tensions between the United States and Iran.
The precious metal slipped to a fresh intraday low in early European trading, with sellers attempting to extend losses below the key $4,100 support level. Although the U.S. Dollar had weakened following Wednesday's less-hawkish FOMC Minutes, the greenback recovered from its one-week low, supported by growing expectations of Fed interest rate hikes in 2026 and persistent geopolitical uncertainty.
From a technical perspective, gold continues to trade within a broader descending channel and remains below its 200-day Simple Moving Average (SMA), keeping the short-term outlook bearish despite signs of improving momentum. The upper boundary of the channel near $4,156.03 represents the first major resistance level, while the 200-day SMA, currently positioned around $4,493.66, reinforces a strong technical ceiling above spot prices.
Momentum indicators suggest a potential corrective rebound. The Moving Average Convergence Divergence (MACD) histogram has turned positive, with the MACD line crossing above the signal line, indicating that bullish momentum is gradually improving within the broader downtrend. However, the Relative Strength Index (RSI) remains near 45, signaling only moderate buying interest rather than a decisive bullish reversal.
On the downside, today's swing low around $4,109–$4,108 serves as immediate support. A stronger support zone lies near the lower boundary of the descending channel at approximately $3,758.88, where buyers could return if selling pressure intensifies.
Fed Rate Hike Expectations Continue to Weigh on Gold
Growing expectations that the Federal Reserve could raise interest rates in 2026 continue to pressure bullion, suggesting that gold's recent rebound from the $4,020 area—its one-week low recorded on Wednesday—has started to lose momentum.
The June 16–17 FOMC Minutes, released on Wednesday, revealed that policymakers remain divided over the future path of monetary policy. While several officials indicated that the federal funds rate could finish the year within or slightly below the current target range, many also acknowledged that additional policy tightening may still be necessary if inflation risks remain elevated.
According to the CME FedWatch Tool, traders continue to price in nearly an 85% probability of at least one Federal Reserve interest rate hike before the end of the year, reinforcing expectations that higher borrowing costs could limit gold's upside potential.
US-Iran Conflict Keeps Safe-Haven Demand Alive
Fresh military tensions between the United States and Iran have once again shifted investor attention toward rising oil prices and their potential impact on global inflation and monetary policy.
The U.S. Central Command (CENTCOM) confirmed that American forces carried out airstrikes on Thursday targeting approximately 90 Iranian military sites, including air defense systems, missile installations, and naval logistics facilities along Iran's coastline. In response, Iran launched missiles and drones targeting U.S. military installations in Bahrain and Kuwait while warning that additional American attacks would trigger a broader regional response, further complicating diplomatic efforts.
Despite the escalation, market sentiment improved slightly after U.S. President Donald Trump told reporters that Iran had reached out to negotiate a deal with Washington. A White House official also reaffirmed that the United States remains committed to the existing memorandum of understanding with Iran.
These mixed geopolitical signals have left investors cautious, suggesting that stronger follow-through buying will be required to confirm that gold has established a short-term bottom. Even so, XAU/USD remains on track to post a modest weekly loss as traders continue to monitor developments surrounding the evolving US-Iran conflict and the Federal Reserve's policy outlook.