Gold (XAU/USD) is trading in a narrow range on Thursday, consolidating between $3,360 and $3,400 after repeatedly testing these levels as short-term support and resistance over recent sessions. Lower trading volumes, attributed to the US observing the Juneteenth holiday, have contributed to subdued price movements despite persistent underlying risks.
Geopolitical Pressures Weigh on Gold
Geopolitical tensions continue to exert significant influence on gold prices. Russia has issued a strong warning against potential US military involvement in Iran, calling such a move “an extremely dangerous step” with “unpredictable negative consequences.” This statement underscores the heightened global concerns amid escalating regional conflicts.
Meanwhile, Israeli Defense Minister Israel Katz emphasized the need for intensified military action following recent escalations. Katz singled out Iranian Supreme Leader Ayatollah Khamenei, declaring a goal to neutralize Iran’s nuclear and missile capabilities. These developments highlight ongoing risks tied to the Israel-Iran conflict.
Economic Factors Apply Additional Pressure
On the economic front, gold prices are under pressure from renewed US dollar strength following the Federal Reserve’s latest policy announcement. The Fed kept interest rates steady at 4.25%–4.50% on Wednesday. However, Chair Jerome Powell’s unexpectedly cautious remarks suggested that monetary policy might remain tighter for longer, contributing to mixed market signals.
While long-term US Treasury yields declined, short-term yields rose, reflecting ongoing concerns about inflation and economic uncertainty.
Key Market Drivers for Gold
Iran’s expanding stockpile of enriched uranium has intensified fears over its nuclear ambitions, prompting the US and Israel to reaffirm their opposition to a nuclear-armed Iran.
Russia warned that any US military intervention in Iran would carry “truly unpredictable negative consequences,” according to Foreign Ministry spokesperson Maria Zakharova.
Israeli Defense Minister Katz’s statement that Khamenei “cannot continue to exist” has further fueled regional tensions.
President Donald Trump is expected to hold a second Situation Room meeting this week to discuss possible US involvement in the Middle East crisis, with a focus on Iran’s underground Fordow nuclear facility.
The Strait of Hormuz remains a critical chokepoint for global energy flows, with about 20% of worldwide energy products passing through. Any disruption could cause spikes in oil prices, increase inflation, and put additional pressure on central banks.
Although the Fed signaled two rate cuts by year-end, Powell emphasized a cautious, data-dependent approach due to inflation and tariff risks.
Gold briefly rallied toward $3,400 after the rate decision but lost momentum as the US dollar rebounded, capping gains.
Technical Outlook: Gold Bulls Show Caution Near $3,370
From a technical perspective, gold prices are hovering around $3,365, just below key resistance at the 23.6% Fibonacci retracement level from the April low of $2,955 to the April high of $3,500, positioned at $3,371. This level aligns closely with the 20-day Simple Moving Average (SMA) at $3,350, underscoring its importance as a short-term barrier.
A sustained break above $3,371 could open the path toward the next psychological resistance at $3,400, followed by the weekly high of $3,452 and potentially the April record high of $3,500.
On the downside, a drop below the 20-day SMA could bring the 50-day SMA at $3,314 into focus, alongside a key psychological support zone near $3,300.
Meanwhile, momentum indicators show signs of cooling, with the Relative Strength Index (RSI) declining to 54 from 60 last week, signaling a more neutral tone in gold’s short-term trend.
As geopolitical and economic uncertainties persist, gold is poised for cautious trading, with investors closely watching for developments that could influence the metal’s direction in the coming days.
Related topics:
- India Surpasses China in Gold Purchases, Buying 51% More in Three Months
- Qilu Bank Enhances Support for Small Businesses with Innovative Financial Tools
- Bitcoin Poised for a Surge Amid Gold’s Delivery Delays, Expert Claims
