Gold (XAU/USD) remained confined within a narrow range on Thursday, trading between $3,360 and $3,400 as markets digested a mix of geopolitical risks and economic signals. These levels have acted as critical short-term support and resistance in recent sessions.
The US observed the Juneteenth holiday, leading to lighter trading volumes and subdued price action. However, underlying geopolitical tensions continue to exert influence on gold prices.
Geopolitical Risks Intensify
Russia issued a stern warning against any potential US military involvement in Iran, describing such a move as “extremely dangerous” with “unpredictable negative consequences.” Meanwhile, Israeli Defense Minister Israel Katz called for intensified operations against Iran, specifically targeting Supreme Leader Ayatollah Khamenei to neutralize nuclear and missile threats. These developments underscore ongoing risks tied to the escalating Israel-Iran conflict.
Economic Factors Weigh on Gold
Gold faced downward pressure from a firmer US dollar following the Federal Reserve’s recent policy statement. Although the Fed held interest rates steady at 4.25%–4.50%, Chair Jerome Powell’s cautious remarks indicated that monetary policy might remain tighter for longer. This tone weighed on gold despite a brief rally toward $3,400 post-announcement.
Short-term US Treasury yields rose amid inflation concerns, even as long-dated yields declined, reflecting market uncertainty.
Market Drivers and Upcoming Risks
Iran’s expanding stockpile of enriched uranium has heightened global fears over its nuclear ambitions, prompting firm opposition from the US and Israel.
President Donald Trump is scheduled for a second Situation Room meeting this week, focusing on potential US responses to Middle East tensions, including discussions on Iran’s Fordow nuclear facility.
Energy markets face risks due to potential disruptions in the Strait of Hormuz, a critical chokepoint handling about 20% of global energy supplies, which could drive up oil prices and inflation.
Technical Outlook
From a technical perspective, gold trades around $3,365, just below the 23.6% Fibonacci retracement level of $3,371 and slightly above the 20-day Simple Moving Average (SMA) at $3,350—both key short-term indicators.
A decisive break above $3,371 could open the way to $3,400 and further to the weekly high of $3,452, with the April peak of $3,500 as a longer-term target. Conversely, a drop below the 20-day SMA may push gold toward the 50-day SMA near $3,314 and psychological support at $3,300.
The Relative Strength Index (RSI) has eased to 54 from last week’s 60, signaling a more neutral momentum among bulls.
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