Key Moments
- XAU/USD falls for a second day to around $4,650, marking an over two-week low during Tuesday’s Asian session.
- Fed rate-cut odds – about a 35% chance of lower borrowing costs by year-end – may limit further USD gains ahead of the FOMC meeting.
Gold Pressured as Dollar Holds Firm
Gold (XAU/USD) remains on the defensive for a second straight session, sliding to the $4,650 area during Asian trading on Tuesday and touching its lowest level in more than two weeks. The move brings prices back toward last week’s swing low, as renewed strength in the US Dollar weighs on the metal.
The Dollar has regained upward momentum amid uncertainty over the second round of US-Iran peace negotiations. That renewed bid for the greenback has become a primary headwind for bullion, even as expectations for a less hawkish US Federal Reserve help cushion the downside for the non-yielding asset ahead of a key policy decision.
Middle East Tensions Support USD, Pressure Gold
Hopes that diplomacy might ease the Iran war have faded after US President Donald Trump canceled a planned visit to Pakistan by his special envoy, Steve Witkoff, and Jared Kushner. In parallel, Iran has presented Washington with a new proposal that postpones discussion of its nuclear program until the conflict ends and shipping disputes in the Gulf are resolved.
Trump is reportedly unhappy with the offer, as it is seen as failing to adequately tackle nuclear concerns. Combined with an ongoing standoff over the Strait of Hormuz, these developments are keeping geopolitical risks elevated. That backdrop is reinforcing the US Dollar’s role as a reserve and safe-haven currency, creating additional drag on Gold prices.
Fed Expectations Temper Dollar Upside
Despite the risk-driven bid for the Dollar, upside appears constrained by shifting views on the Federal Reserve’s policy path. Data from CME Group’s FedWatch Tool indicates that market participants assign roughly a 35% probability that the Fed will reduce interest rates by the end of this year.
This repricing is restraining aggressive long-Dollar positioning and, in turn, helping to limit deeper losses in Gold as traders position ahead of the Federal Open Market Committee’s two-day meeting, which begins on Tuesday. Market attention is set to center on the post-meeting press conference, where remarks from outgoing Fed Chair Jerome Powell will be scrutinized for indications on the longer-term policy outlook.
At the same time, new headlines related to the Middle East crisis are expected to remain a critical driver for the Dollar and, by extension, a key source of direction for XAU/USD. Overall, the current macro and geopolitical setup appears to lean in favor of Gold sellers and supports the prospect of a downside break from the short-term range that has contained prices since the early part of this month.
Technical View: XAU/USD Testing Range Support
From a technical perspective, Gold continues to trade close to the lower boundary of its recent consolidation zone. Repeated failures to secure a sustained move above the 200-period Simple Moving Average (SMA) on the 4-hour chart have reinforced the bearish tone.
A decisive move below the trading range floor near $4,655 would strengthen the negative bias and signal that sellers are regaining control. Momentum indicators currently align with that view: the Relative Strength Index (RSI) is holding just under the midpoint around 41, while the Moving Average Convergence Divergence (MACD) histogram is below zero and the MACD line is under its signal line. Together, these readings point to prevailing, if not aggressive, downside momentum.
On the upside, initial resistance is located at the 200-period SMA on the 4-hour chart, currently around $4,723.13. Bulls would need to push and sustain prices above this level to ease immediate selling pressure and open scope for a more meaningful recovery. Many traders are likely to wait for clearer evidence of base-building, or for RSI and MACD to turn higher, before concluding that a durable bottom has been established.
US Dollar Performance Against Major Currencies
The following table shows today’s percentage change in the US Dollar (USD) versus a basket of major currencies. The Dollar has been strongest against the New Zealand Dollar so far.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.08% | 0.05% | -0.18% | 0.06% | 0.10% | 0.21% | 0.19% | |
| EUR | -0.08% | -0.04% | -0.24% | -0.04% | -0.01% | 0.08% | 0.11% | |
| GBP | -0.05% | 0.04% | -0.19% | 0.00% | 0.05% | 0.14% | 0.15% | |
| JPY | 0.18% | 0.24% | 0.19% | 0.24% | 0.27% | 0.36% | 0.36% | |
| CAD | -0.06% | 0.04% | -0.01% | -0.24% | 0.04% | 0.12% | 0.13% | |
| AUD | -0.10% | 0.00% | -0.05% | -0.27% | -0.04% | 0.10% | 0.13% | |
| NZD | -0.21% | -0.08% | -0.14% | -0.36% | -0.12% | -0.10% | 0.00% | |
| CHF | -0.19% | -0.11% | -0.15% | -0.36% | -0.13% | -0.13% | -0.00% |
The heat map should be read using the base currency from the left column and the quote currency from the top row. For instance, selecting USD on the left and moving horizontally to JPY shows the percentage change for USD (base)/JPY (quote).
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