Gold price holds at $4,100! Before FOMC, will the pullback continue?
Gold holds around $4,100 ahead of FOMC minutes; is it a relief rally?
Gold price maintains around $4,100
Gold (XAU/USD) remains near the $4,100 level with a modest rebound.
Behind this, ahead of the FOMC Minutes, there has been a pause in dollar buying.
With the dollar’s strength easing somewhat, safe-haven gold has seen some buying back.
However, the market remains cautious, and a genuine uptrend has not yet been established.
Middle East tensions flare up again
Meanwhile, tensions in the Middle East are rising again.
The U.S. military attacked after tanker attacks in the Strait of Hormuz, and retaliatory strikes on Iran were carried out.
Moreover, the U.S. revoked favorable measures concerning Iranian oil exports, sending crude oil prices sharply higher.
Rising energy prices could rekindle inflation, and market sentiment is growing that the Fed will maintain high interest rates for an extended period.
Markets price in rate hikes for the year
According to CME FedWatch, the marketassigns an probability of over 80% for at least one more rate hike (0.25%) this year.
Additionally,
- U.S. 10-year Treasury yield:4.567%
- U.S. 2-year Treasury yield:4.189%
has risen, supporting the dollar.
For gold, which does not earn interest, a high-rate environment remains a drag.
Technically, selling into rallies dominates
Gold has briefly rebounded, but the overall trend remains downward.
It is still trading within a downtrend channel and is below the 200-day moving average, indicating the medium-term downward trend persists.
On the other hand, the MACD has turned positive, signaling a short-term rebound momentum returning.
However, the RSI around 44 remains below the neutral line, so a true uptrend reversal has not occurred.
On the upside,around $4,164is the first major resistance, and a clear break above this level would point to the next target of the 200-day moving average ($4,491).
On the downside, the lower bound of the downtrend channel around$3,714is a significant support level to watch.
Summary
- Gold maintains around $4,100 and rebounded
- Dollar buying eases ahead of the FOMC minutes
- Rising tensions in the Middle East push crude prices higher
- Markets price in over 80% odds of an additional rate hike this year
- Technically, within a downtrend channel,the pullback (selling into rallies) remains dominant.
