Gold is trading within a narrow range on Thursday, consolidating between $3,360 and $3,400—a zone that has repeatedly acted as key short-term support and resistance in recent sessions.
With the United States observing the Juneteenth holiday, subdued trading volumes have contributed to limited price movement, though underlying risks continue to weigh heavily on the precious metal.
Geopolitical Risks Drive Market Sentiment
Geopolitical tensions remain a significant factor influencing gold prices. Russia issued a stern warning against any potential US military intervention in Iran, labeling such action as an “extremely dangerous step” with “unpredictable negative consequences,” according to Foreign Ministry spokesperson Maria Zakharova.
Meanwhile, Israeli Defense Minister Israel Katz called for intensified military strikes amid escalating conflict, specifically targeting Iran’s Supreme Leader Ayatollah Khamenei and underscoring efforts to neutralize nuclear and missile threats posed by Tehran.
Economic Factors Add Pressure
On the economic front, gold faces headwinds from renewed US dollar strength following the Federal Reserve’s recent policy update. Although the Fed held interest rates steady at 4.25%–4.50% on Wednesday, Chair Jerome Powell’s unexpectedly cautious remarks suggested that monetary policy may remain tighter for longer than previously anticipated.
This mixed message led to a decline in long-term US Treasury yields, while short-term yields climbed—reflecting persistent inflation concerns and uncertainty over future rate moves.
Key Market Movers to Watch
Iran’s expanding stockpile of enriched uranium has heightened fears over its nuclear ambitions, prompting vocal opposition from both the US and Israel.
Russia reiterated that any US military involvement in Iran would carry “truly unpredictable negative consequences.”
Israeli Defense Minister Katz intensified rhetoric against Iran’s leadership, further elevating regional tensions.
President Donald Trump is slated to hold a second Situation Room meeting this week, reportedly to discuss possible US action concerning Iran’s underground Fordow nuclear facility.
The strategic Strait of Hormuz remains a critical chokepoint, with about 20% of global energy supplies passing through it—any disruption could trigger a spike in oil prices, inflationary pressures, and challenges for central banks.
The Fed’s decision to keep rates steady was coupled with cautious commentary from Powell, emphasizing data dependency and the risks posed by inflation and tariffs.
Gold briefly rallied toward $3,400 after the Fed announcement, but a rebound in the US dollar capped further gains.
Technical Outlook: Caution Prevails Near $3,370
From a technical perspective, gold is trading around $3,365, close to the 23.6% Fibonacci retracement level of the April price range ($2,955 to $3,500) at $3,371. This resistance level coincides with the 20-day Simple Moving Average (SMA) near $3,350, underscoring its significance.
A sustained break above $3,371 could pave the way for a test of the psychological $3,400 level, followed by the weekly high at $3,452 and potentially the April record peak at $3,500.
Conversely, a drop below the 20-day SMA may bring the 50-day SMA at $3,314 and the $3,300 support zone into focus.
Meanwhile, momentum indicators signal a loss of bullish strength; the Relative Strength Index (RSI) has retreated to 54, reflecting a more neutral stance compared to last week’s reading of 60.
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