After slipping during early European trading, gold found support near $3,345 and recovered to hover around the $3,366–$3,367 level, virtually unchanged on the day. The move reflects mixed market signals as investors weigh the Federal Reserve’s hawkish policy stance against growing global uncertainty.
The U.S. dollar extended its recovery from a three-year low following the Federal Reserve’s decision on Wednesday to maintain interest rates. While policymakers left rates unchanged as expected, their updated projections suggested only two rate cuts through 2025. The so-called dot plot also revealed that seven of 19 Fed officials now favor no cuts this year—up from four in March—amid concerns that inflation could remain elevated, potentially ending the year at 3%.
The Fed’s more cautious outlook strengthened the dollar, putting downward pressure on the non-yielding gold. However, mounting geopolitical tensions and persistent trade uncertainties underpinned safe-haven demand, helping gold pare its losses.
Risk sentiment remained fragile as the Israel-Iran conflict entered its seventh day. Reports on Wednesday indicated that U.S. President Donald Trump convened a Situation Room meeting to review military options. While Trump has reportedly approved certain strike plans, he is said to be weighing the risks of broader military involvement in the Middle East.
Meanwhile, the Israel Defense Forces (IDF) issued warnings to residents in central Iran’s cities of Arak and Khondab, urging evacuation amid ongoing operations targeting Iranian military assets. The developments heightened fears of a wider regional conflict, fueling demand for safe-haven assets like gold.
In parallel, Trump’s recent remarks on imposing tariffs on the pharmaceutical sector added to market jitters. With a July 9 deadline approaching for increased U.S. tariffs, the lack of clarity further supported gold’s appeal as a risk-off asset.
Trading volumes are expected to thin on Thursday as U.S. markets close in observance of Juneteenth National Independence Day. In the absence of major U.S. economic releases, gold’s near-term direction is likely to remain closely tied to dollar movements and evolving geopolitical headlines.
From a technical perspective, gold’s resilience near the ascending trend channel support at $3,345 suggests buyers are defending key levels, though upside momentum remains capped by the stronger greenback.
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