Key Moments
- XAU/USD trades below the $4,500 psychological level, its weakest point since March 30, amid persistent intraday losses.
- Technically, XAU/USD is holding above the 200-day SMA near $4,363.73, but momentum indicators remain weak and favor further downside.
Gold Under Pressure as Dollar Strengthens
Gold (XAU/USD) is holding onto intraday declines below the key $4,500 level – its lowest trade since March 30 – during early European dealings on Wednesday. The metal remains vulnerable as a firm US Dollar (USD) trades close to a six-week high, reflecting persistent risk aversion and interest-rate expectations that are unfavorable for non-yielding assets like Gold.
Market participants remain wary about the prospects for a US-Iran peace agreement. This caution, combined with ongoing inflation concerns and expectations for a more hawkish Federal Reserve (Fed), is helping the USD maintain its recent strength and is acting as a clear drag on the Gold price.
Geopolitics, Iran Talks, and the Dollar’s Safe-Haven Bid
US President Donald Trump said on Tuesday that America may need to strike Iran again if a deal is not reached and that he had been an hour away from ordering an attack before postponing it following a request from three Gulf leaders. Meanwhile, Vice President JD Vance said the US and Iran have made a lot of progress in their talks, and neither side wants to see a resumption of the military campaign.
Despite these remarks, markets remain doubtful that a durable diplomatic solution to the Iran conflict is close, given what are described as major disagreements over Tehran’s nuclear program and the Strait of Hormuz. This unresolved standoff continues to underpin the Greenback’s role as a reserve currency, serving as a major headwind for Gold.
Oil, Inflation Fears, and Fed Rate Path Support the USD
The stalemate in US-Iran negotiations is also helping to keep Crude Oil prices elevated near their monthly highs. Higher energy costs are feeding inflation concerns and reinforcing expectations for tighter Fed policy.
According to the CME Group’s FedWatch Tool, traders are now pricing in over a 55% chance that the US central bank will raise borrowing costs by at least 25 basis points (bps) in 2026. The outlook was reaffirmed by comments from Philadelphia Fed President Anna Paulson, who said that an appropriate rate increase is possible if growth exceeds potential or inflation threats arise.
These dynamics have contributed to a sharp rise in US Treasury yields, which in turn support the US Dollar and intensify downward pressure on Gold, a non-interest-bearing asset.
Market Focus on FOMC Minutes and Middle East Developments
Despite the Dollar’s firm tone, USD bulls are showing some caution ahead of the release of the FOMC Minutes due later in the North American session. Investors are looking to the document for clearer guidance on the Fed’s policy trajectory.
Further headlines related to the Middle East situation could also influence flows into Gold. However, the current macro backdrop appears to favor the Dollar, suggesting that the path of least resistance for XAU/USD remains skewed to the downside. Any short-term rebound in Gold is likely to encounter selling pressure and may fail to gain lasting traction.
Technical Picture: Key Levels and Momentum Signals
From a chart perspective, sustained trade beneath the $4,500 psychological level is likely to be interpreted as a fresh signal for bearish participants, reinforcing the scope for additional downside.
Momentum indicators are soft: the Relative Strength Index (RSI) is hovering in the mid-30s, while the Moving Average Convergence Divergence (MACD) remains in negative territory. This configuration points to fading upside momentum even as prices are still supported by the long-term trend line around the 200-day Simple Moving Average (SMA), which currently sits near $4,363.73.
A clean break below the 200-day SMA would open the door to a deeper corrective move in Gold. Conversely, if XAU/USD manages to hold above this key moving average, the metal could consolidate within its broader uptrend, although the present momentum backdrop remains weak.
(The technical analysis of this story was written with the help of an AI tool.)
US Dollar Performance Over the Past Week
Over the last seven days, the US Dollar has gained against all major counterparts shown in the table below, with the largest advance recorded versus the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 1.16% | 1.10% | 0.92% | 0.45% | 1.88% | 1.97% | 1.14% | |
| EUR | -1.16% | -0.07% | -0.33% | -0.72% | 0.74% | 0.83% | -0.04% | |
| GBP | -1.10% | 0.07% | -0.30% | -0.66% | 0.73% | 0.87% | 0.00% | |
| JPY | -0.92% | 0.33% | 0.30% | -0.38% | 1.04% | 1.08% | 0.26% | |
| CAD | -0.45% | 0.72% | 0.66% | 0.38% | 1.43% | 1.47% | 0.66% | |
| AUD | -1.88% | -0.74% | -0.73% | -1.04% | -1.43% | 0.08% | -0.77% | |
| NZD | -1.97% | -0.83% | -0.87% | -1.08% | -1.47% | -0.08% | -0.85% | |
| CHF | -1.14% | 0.04% | -0.00% | -0.26% | -0.66% | 0.77% | 0.85% |
The heat map above shows percentage moves between major currencies. The base currency is taken from the left-hand column, and the quote currency is taken from the top row. For instance, selecting the US Dollar in the left column and moving across to the Japanese Yen cell displays the percentage change in USD (base)/JPY (quote).
TradingPedia.com is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover 
