Gold Prices Stay Under Pressure as Rising US Bond Yields, Stronger Dollar, and Hormuz Tensions Weigh on Bullion
Gold prices remained under pressure during the European session on Tuesday, although the precious metal continued to trade above the key $4,100 level. Renewed geopolitical tensions in the Strait of Hormuz lifted crude oil prices, reviving inflation concerns that pushed U.S. Treasury yields higher and strengthened the U.S. dollar, adding fresh pressure to non-yielding bullion.
The XAU/USD pair maintained a bearish short-term outlook after remaining below its 200-day Simple Moving Average (SMA) at $4,489.97 while continuing to trade inside a descending channel. Although the Moving Average Convergence Divergence (MACD) indicator has turned positive—with the MACD line crossing above the signal line and the histogram expanding into positive territory—the bullish momentum remains insufficient to reverse the prevailing downtrend.
Meanwhile, the Relative Strength Index (RSI) stands at 44.16, remaining below the neutral 50 mark and signaling that bearish sentiment still dominates despite the recent rebound.
Gold Technical Outlook: Key Support and Resistance Levels
The $4,100 level continues to act as immediate support for gold prices. A sustained break below this area could expose the lower boundary of the descending channel near $3,844.34, where stronger buying interest is expected to emerge.
On the upside, immediate resistance is located around the upper boundary of the descending channel near $4,296.64. Additional resistance is seen at the 200-day SMA around $4,489.97, followed by a stronger structural barrier near $4,572.41.
Fed Rate Expectations Could Limit Gold's Downside
Despite the current bearish pressure, expectations for fewer Federal Reserve interest rate hikes could prevent a deeper decline in gold prices.
Tensions in the Strait of Hormuz remain elevated as Tehran seeks to strengthen its strategic control over one of the world's most critical shipping lanes. Iranian officials continue to defend proposed transit charges as fees for maritime security, vessel monitoring, and environmental protection rather than tolls, despite strong opposition from the United States.
Adding to market concerns, a maritime agency reported that an oil tanker was struck by an unidentified projectile while transiting the Strait of Hormuz. The incident has raised doubts over the fragile peace agreement between the United States and Iran, providing additional support for crude oil prices and fueling inflation concerns.
Weak US Jobs Data Reduces Fed Tightening Bets
Meanwhile, weaker-than-expected U.S. Nonfarm Payrolls (NFP) data for June prompted investors to scale back expectations for additional Federal Reserve tightening.
Market participants have shifted their outlook from anticipating one or two rate hikes in 2026 to expecting between zero and one increase, limiting further gains in the U.S. dollar and reducing bearish pressure on gold.
Recent economic data also offered little support for the greenback. The ISM Services PMI eased to 54.0 in June from 54.5 in May, matching market expectations but failing to provide fresh momentum for the U.S. currency.
FOMC Minutes in Focus as Investors Await Fresh Policy Signals
Investors are now refraining from making aggressive directional bets ahead of the release of the Federal Open Market Committee (FOMC) Minutes, which are expected to provide additional guidance on the Federal Reserve's future monetary policy path.
Geopolitical developments in the Middle East will also remain a major driver for the U.S. dollar and gold prices in the coming sessions.
For now, the broader fundamental backdrop suggests traders should wait for stronger selling pressure before concluding that gold's recent rebound from its yearly low has completely lost momentum.