Key Moments
- Gold (XAU/USD) fell to a nearly two-week low around $4,115 amid sustained US Dollar strength.
- Hawkish signals from the Federal Reserve and firm expectations of at least one rate hike have supported the USD.
- Investors are watching upcoming US data releases, including flash PMIs and Thursday’s PCE and final Q1 GDP, for fresh direction.
Gold Under Pressure as Dollar Holds Near One-Year High
Gold (XAU/USD) extended its decline from the Asian session on Tuesday, dropping to a nearly two-week low near the $4,115 area in the latest trading, weighed down by a broadly stronger US Dollar. Persistent bullish sentiment toward the USD has overshadowed the metal, even as developments in US-Iran discussions have been described as positive.
Market participants remain skeptical about the prospects for a final agreement between Washington and Tehran. That caution, alongside the US Federal Reserve’s hawkish tone, has helped the USD maintain its advance to the strongest level since May 2025, keeping pressure on the non-yielding precious metal.
US-Iran Negotiations Show Progress but Mixed Signals Persist
Mediators Qatar and Pakistan stated on Monday that the initial round of talks between the United States and Iran – aimed at securing a comprehensive deal to end the conflict – concluded with “encouraging progress.” In a joint statement following discussions in Switzerland, the mediators noted that both parties agreed on a roadmap to reach a final agreement within 60 days. As part of these efforts, the US temporarily lifted sanctions on Iranian oil exports, fulfilling a key pledge.
In addition, the US is set to mediate another round of negotiations focused on halting clashes in Lebanon between Iran-backed Hezbollah and Israel. Even so, market optimism remains restrained as messaging between Washington and Tehran diverges.
US Vice President JD Vance said that Iran agreed to admit nuclear monitors and is prepared to accept extensive weapons inspections as part of ongoing diplomatic efforts. However, Iran’s foreign ministry told state media that Tehran had made no new commitments on nuclear inspections.
At the same time, US President Donald Trump said preventing Iran from obtaining a nuclear weapon outweighs the potential economic consequences of prolonged military action. Separately, Iran’s chief negotiator and parliamentary speaker, Mohammad Bagher Ghalibaf, told state media on Tuesday that the Strait of Hormuz will remain under Tehran’s administration and would not return to the pre-war status. These factors keep a geopolitical risk premium in play and continue to support demand for the safe-haven US Dollar.
Fed’s Hawkish Stance Supports Dollar, Weighs on Gold
On the policy front, the Federal Reserve indicated last week that it expects to raise interest rates this year if inflation does not ease. Chicago Fed President Austan Goolsbee acknowledged that inflation is moving in the wrong direction and remains well above the central bank’s 2% target.
This has reinforced market pricing for at least one additional rate increase, either in September or December, bolstering the USD. Higher rate expectations typically benefit the Dollar while undermining Gold, which does not offer a yield, and this dynamic continues to act as a headwind for XAU/USD.
Key Data Ahead: PMIs, PCE, and GDP in Focus
Traders are now awaiting the release of flash US Purchasing Managers’ Index (PMI) data due later in the North American session. These readings, together with scheduled remarks from influential Federal Open Market Committee (FOMC) members, are expected to guide near-term Dollar moves and, by extension, Gold prices.
Market attention remains centered on Thursday’s US Personal Consumption Expenditures (PCE) Price Index and the final estimate of Q1 GDP, which could further influence expectations for Fed policy. In parallel, ongoing headlines around US-Iran negotiations are likely to sustain volatility across financial markets and potentially create additional trading opportunities.
Technical Picture: Bears in Control Below 100-SMA on 4-Hour Chart
From a technical standpoint, XAU/USD maintains a bearish short-term bias while trading below the 100-period Simple Moving Average (SMA) on the 4-hour chart. The Moving Average Convergence Divergence (MACD) indicator (12, 26, 9) has turned slightly positive, with the signal line just above the zero mark, hinting at the possibility of a modest near-term reprieve. However, the Relative Strength Index (RSI) stands at 37.17, indicating weak momentum and suggesting that any recovery would likely be corrective in nature.
On the upside, the 100-period SMA at $4,311.19 represents the first notable resistance level. A sustained move back above this barrier would be needed to ease immediate downside pressure and pave the way for a more constructive recovery phase. Until then, many traders may view the current band as a fragile consolidation zone, with repeated failures to test $4,311.19 leaving Gold vulnerable to additional pullbacks on the 4-hour timeframe.
(The technical analysis of this story was written with the help of an AI tool.)
US Dollar Performance Over the Past Week
The table below outlines the percentage change of the US Dollar against major currencies over the last 7 days. Over this period, the USD performed most strongly versus the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | — | 1.46% | 1.34% | 0.81% | 1.33% | 1.57% | 2.27% | 1.83% |
| EUR | -1.46% | — | -0.17% | -0.68% | -0.16% | 0.11% | 0.81% | 0.37% |
| GBP | -1.34% | 0.17% | — | -0.56% | -0.04% | 0.24% | 0.94% | 0.46% |
| JPY | -0.81% | 0.68% | 0.56% | — | 0.54% | 0.77% | 1.74% | 1.09% |
| CAD | -1.33% | 0.16% | 0.04% | -0.54% | — | 0.22% | 1.03% | 0.47% |
| AUD | -1.57% | -0.11% | -0.24% | -0.77% | -0.22% | — | 0.73% | 0.26% |
| NZD | -2.27% | -0.81% | -0.94% | -1.74% | -1.03% | -0.73% | — | -0.40% |
| CHF | -1.83% | -0.37% | -0.46% | -1.09% | -0.47% |
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