Gold Slips Back Below $4,150 as Iran Deal Skepticism and Fed Hike Bets Bolster the Dollar

Gold (XAU/USD) resumed its decline during Asian trading hours on Tuesday, sliding back below $4,150 after briefly recovering the previous session. A persistently strong US dollar, reinforced by hawkish Federal Reserve signals and unresolved US-Iran nuclear tensions, continues to cap any meaningful recovery in the precious metal.

Iran Talks: Progress on Paper, Skepticism in the Market

On the surface, US-Iran diplomatic developments appear constructive. Mediators Qatar and Pakistan confirmed that the first round of Switzerland-based negotiations concluded with both sides agreeing on a roadmap toward a final deal within 60 days. The US also temporarily lifted sanctions on Iranian oil exports as a goodwill gesture.

Yet the market's reaction tells a different story. Conflicting messages from both sides are keeping geopolitical risk premium firmly in play. US Vice President JD Vance stated Iran had agreed to admit nuclear monitors and accept weapons inspections, while Iran's foreign ministry publicly denied any new commitments on inspections. Iran's chief negotiator Mohammad Bagher Ghalibaf further declared that the Strait of Hormuz — a critical global oil chokepoint — would remain under Tehran's control and would not revert to pre-war status. President Trump, meanwhile, signaled that preventing Iran from obtaining a nuclear weapon takes priority over economic costs of prolonged military action. The net result: safe-haven demand for both the dollar and gold remains a two-way tug rather than a clean directional trade.

Fed Hawkishness Keeps Dollar Bid, Gold Pressured

The more durable headwind for gold comes from the monetary policy front. The Fed signaled last week that rate hikes remain on the table if inflation stays sticky. Chicago Fed President Austan Goolsbee reinforced that view, acknowledging inflation is running well above the 2% target and moving in the wrong direction. Per CME FedWatch, markets have fully priced in at least one 25-basis-point hike — either September or December — keeping the US dollar anchored near its highest level since May 2025 and directly suppressing non-yielding gold.

Technical Structure: Bearish Bias Intact

Gold's chart offers little comfort for bulls. On the 4-hour timeframe, price remains below the 100-period SMA at $4,311.19 — the first meaningful resistance level that needs to be reclaimed to ease immediate downside pressure. The RSI at 37.17 sits in weak territory, confirming that any bounce is likely corrective rather than a genuine trend reversal. The MACD has turned marginally positive, offering a faint hint of near-term relief, but insufficient to shift the broader bias.

A sustained break back above $4,311.19 is needed to open recovery potential. Until then, the path of least resistance remains lower.

What to Watch This Week

Traders should focus on two near-term catalysts: flash US PMI data due Tuesday during the North American session, alongside scheduled FOMC member speeches, will provide the first directional read on dollar momentum. The primary focus, however, falls on Thursday's US PCE Price Index and final Q1 GDP print — the Fed's preferred inflation gauge that could either cement or soften September hike expectations meaningfully.

Trader Takeaway: Gold's near-term bias remains bearish below $4,311.19. Dollar strength and Fed hawkishness are the dominant headwinds, while Iran deal uncertainty prevents a clean safe-haven unwind. Thursday's PCE print is the week's key risk event.

Sources: FXStreet, CME FedWatch Tool, Federal Reserve June 2025 Statement, Qatar-Pakistan Joint Mediator Statement