Gold tested major support near its 200-day moving average before rebounding, raising the possibility that the recent bearish correction may be nearing completion.
Gold prices hit a 2-month low as firmer yields, a stronger dollar and Fed rate hike bets keep pressure on XAUUSD ahead of key PCE data.
Iran deal optimism did not provide support to precious metals markets.
The gold market has drifted lower on Wednesday, as traders continue to see a lot of downward pressure on precious metals overall. With this, the market looks likely to be a “fade the rally” situation.
Michael Boutros, FOREX.com Senior Market Analyst, breaks down the growing technical risks facing gold prices as momentum deteriorates and key long-term support levels begin to fail. Gold is now approaching a critical pivot zone after falling nearly 9% from the April high, with traders closely watching U.S. inflation data, Federal Reserve expectations and geopolitical headlines from Iran for the next major catalyst.
Gold holds in red for the second consecutive day on Wednesday and pressure the floor of seven-day range ($4453), also moving into lower part of short-term bear-channel (off $4889, mid-Apr peak).
Gold declines as inflation worries weight despite Oil sell-off
With the stable Middle East truce reducing geopolitical risk premium, gold and silver reacted to technical pressure. Gold broke lower below $4,500 targeting $4,453 while silver held near $76.59 with neutral-to-bearish structure.
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