Gold Slides Toward Two-Week Low as Dollar, Fed Bite On

Key Moments

Gold Extends Decline as Fed Expectations Lift the Dollar

Gold (XAU/USD) continues to lose ground for a second consecutive session and has now fallen in five of the past six sessions, slipping to a near two-week low during Asian trading on Wednesday. The move comes even as investors see reduced inflation risks following a recent slide in Crude Oil, with traders instead intensifying bets on further policy tightening by the US Federal Reserve.

That shift in expectations has propelled the US Dollar to its strongest level since May 2025, adding pressure on the non-yielding metal and pulling prices down toward the $4,050 area. Gold now trades within close range of the year-to-date trough reached earlier this month.

Oil Weakness Eases Inflation Concerns but Fails to Support Gold

Crude Oil prices have retreated sharply over the last month or so, hitting a new low since early March on Wednesday. The decline has been driven in part by the resumption of maritime traffic through the Strait of Hormuz. According to an Iranian military source cited by Fars news agency, a limited number of vessels are being allowed to transit the strait each day under coordination with Iran’s Revolutionary Guards Navy.

Further pressure on Oil has come from a temporary policy move by the United States. The US Treasury Department has issued a 60-day sanctions waiver permitting the production, delivery, and sale of Iranian crude oil, petroleum, and petrochemical products. This step has reduced worries about global supply disruption and helped alleviate upstream inflation pressures. However, the shift in inflation sentiment has not been enough to attract sustained buying interest in Gold, as rate expectations and the stronger US Dollar dominate trading dynamics.

Fed’s Hawkish Stance and Mixed Iran Signals Support the Greenback

Investors have markedly increased wagers that the Federal Reserve will raise rates by at least 25 basis points in 2026 following the central bank’s hawkish tone last week. Nine of the Fed’s 19 policymakers indicated they expected the policy rate to move higher in order to keep inflation in check.

New Fed Chair Kevin Warsh underscored that focus on price stability in his post-meeting press conference, signaling that the central bank may be reluctant to lower rates quickly even if growth moderates. That messaging has underpinned the US Dollar and weighed on Gold.

At the same time, conflicting signals around Iran’s nuclear program have added another layer of support for the Greenback. US Vice President JD Vance said on Monday that peace talks in Switzerland had resulted in Iran agreeing to invite inspectors from the International Atomic Energy Agency (IAEA) to its nuclear facilities. Moreover, US President Donald Trump said that Iran had “fully and completely” agreed to the highest level of nuclear inspections long into the future. However, Iran’s state media, citing the foreign ministry, reported that Tehran had made no new commitments on nuclear inspections. These divergent messages keep geopolitical risk premiums in focus, favoring US Dollar strength and reinforcing downside risks for Gold.

Market participants are now turning their attention to the upcoming US Personal Consumption Expenditures (PCE) Price Index release on Thursday, which could provide the next key catalyst for both the Dollar and XAU/USD.

Technical Picture: Bears Maintain Control Below 100-SMA

From a technical perspective, Gold remains under clear pressure on the 4-hour chart. Repeated failures to clear the 100-period Simple Moving Average (SMA) have kept the short-term bias skewed to the downside. A decisive break and sustained move below the $4,100 handle is being viewed as a fresh confirmation of bearish momentum in XAU/USD.

Momentum gauges reinforce that view. The Relative Strength Index (RSI) is hovering near oversold territory at around 31, while the Moving Average Convergence Divergence (MACD) is entrenched in negative territory and trending lower. These readings indicate that sellers remain in control, even if intermittent short-covering rallies emerge. The technical configuration supports the prospect of a move back toward the year-to-date lows in the $4,024-$4,023 band seen earlier this month.

On the upside, the 100-period SMA on the 4-hour chart, currently near $4,287.33, stands as the first significant resistance level. A sustained recovery above that barrier would be needed to temper the prevailing bearish outlook and signal scope for a more constructive consolidation phase. Until such a break occurs, any approach toward the $4,280-$4,290 area is likely to attract renewed selling interest, especially while momentum indicators fail to show evidence of a durable bullish reversal.