Gold prices remained under pressure early Thursday, June 25, with XAU/USD moving back toward seven-month lows near the $3,950 region. The yellow metal continues to struggle as the US Dollar holds firm, supported by rising expectations that the Federal Reserve could raise interest rates again this year.
The latest weakness also comes as markets digest mixed signals surrounding the US-Iran peace deal, especially around Iran’s nuclear program and shipping access through the Strait of Hormuz. While easing oil prices have reduced some inflation concerns, investors remain cautious ahead of the US core Personal Consumption Expenditures, the Fed’s preferred inflation gauge.
From a technical perspective, XAU/USD maintains a clearly bearish short-term structure. Gold is trading around $3,969, holding below its major simple moving averages and showing limited signs of a strong recovery.
The 21-day SMA near $4,280 now acts as the first major resistance level. As long as gold remains below this area, any rebound may be treated as corrective rather than a shift in trend. Above that, the next key resistance zone sits around the 50-day and 200-day SMAs, both clustered near $4,470 to $4,485. A sustained move above this zone would be needed to weaken the current bearish bias.
The 100-day SMA, positioned near $4,690, remains a more distant upside barrier. Until buyers reclaim at least the $4,280 area, sellers are likely to remain in control.
Adding to the negative outlook, the 50-day SMA is close to crossing below the 200-day SMA. If confirmed on a daily closing basis, this would form a Death Cross, a bearish technical signal often associated with extended downside momentum.
The Relative Strength Index is hovering near 29, placing gold close to oversold territory. This suggests that a short-term bounce cannot be ruled out. However, oversold conditions alone may not be enough to reverse the broader downtrend, especially while the US Dollar remains supported and gold trades below key resistance levels.
With no clear nearby moving-average support on the daily chart, the next downside areas are likely to be shaped by previous swing lows and short-term price action. This leaves gold vulnerable to further losses unless buyers step back in with enough strength to push prices above the $4,280 region.
Fed Rate Hike Bets Weigh on Gold
Gold continues to face pressure from rising expectations of at least two Federal Reserve rate hikes this year, with markets increasingly pricing in the possibility of the first increase as early as September.
Higher interest rate expectations are negative for gold because the metal does not offer yield. As Treasury yields and the US Dollar strengthen, holding gold becomes less attractive for investors seeking income or dollar-backed safety.
The hawkish tone from new Fed Chair Kevin Warsh has further strengthened the case for higher rates. Combined with elevated inflation levels and resilient US economic expectations, the broader macro backdrop remains challenging for gold bulls.
For now, the path of least resistance remains tilted to the downside. Gold needs to reclaim the $4,280 region to ease immediate bearish pressure. Until then, the looming Death Cross and firm US Dollar suggest that XAU/USD may remain vulnerable to deeper losses.
