Gold price at six-month lows, pressured by expectations of Fed rate hikes and a stronger dollar
Gold prices hit their lowest in six months as Fed rate hike expectations and a stronger dollar weigh
Today’s headlines
Gold (XAU/USD) fell to six-month lows on June 11, marking its lowest point since November 2025.
From the start of the year, it gave back all its gains, fueling a bearish mood in the market.
As of writing, it hovered around $4,080, having briefly declined to $4,023.
Why did it fall?
There are three main factors behind the decline this time.
① Rising expectations for Fed rate hikes
Oil prices are rising due to worsening Middle East tensions, which is increasing inflationary pressure.
The market is growing convinced that
“the Fed might consider tightening rather than cutting rates.”
Because gold does not generate interest, higher rates are negative for gold.
② Stronger dollar
Traditionally, gold is bought as a safe asset, but funds are currently flowing into the U.S. dollar.
The dollar index (DXY) trades above 100, its highest in months since April.
Dollar strength weighs on gold prices.
③ Rising inflation indicators
May US CPI rose 4.2% year-on-year, the highest in about three years.
Additionally, the latest PPI (Producer Price Index) came in at 6.5% y/y, above market expectations.
fears of re-accelerating inflation have intensified.
Middle East tensions remain high
This week, reports that Iran shot down a U.S. Army Apache helicopter have heightened tensions in the region.
President Trump also stated on social media
“Tonight, I will strike Iran very hard.”
He also hinted at attacks on Iran’s key oil export hubs.
Concerns over crude supply keep oil prices elevated.
Market direction today
The current market is characterized by
・Strong dollar
・Rising interest rates
・Higher oil
which present headwinds for gold.
In the short term, selling rallies remains dominant, and a cautious approach is warranted until strong bullish catalysts emerge.
Technical analysis
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Gold clearly broke below the 200-day moving average, indicating a continued bearish trend on the technicals.
RSI is approaching the oversold territory, so temporary rebounds should be watched, but no reversal in the downtrend is visible at present.
XAU/USD remains in a bear market.
The current price is well below
- 200-day moving average (SMA)
- 50-day moving average (SMA)
- 100-day moving average (SMA)
which act as resistance levels on the upside.
RSI at oversold levels
Daily RSI sits around 26, entering the oversold zone.
Meanwhile,
MACD remains deep in negative territory,
- MACD line below the signal line
- Histogram in negative territory
indicating sustained downside momentum.
Therefore,
“the downside momentum is strong, but a short-term rebound could occur if selling oversells”
is a plausible view.
Resistance levels to watch on the upside
If gold rebounds, key targets are:
- 200-day SMA: around $4,446.50
- 50-day SMA: around $4,593.71
- 100-day SMA: around $4,774.23
These levels are seen as strong resistance and could cap upside in a rebound.
Support levels to watch on the downside
Key supports are
- $4,000 (psychological level)
- $3,900 (horizontal support)
which act as important supports.
If a clear break below $3,900 occurs,
a deeper downtrend could continue toward new lows.
Tiger Eye View
After a sharp drop, instead of jumping in to sell, one should wait for a pullback to confirm the setup.
Rather than being swayed by news, focus on key horizontals and reversal signals to trade cautiously.
Note: This article is based on market news and does not constitute investment advice.
