Gold slips to two-week low near $4,050 as Fed hike bets lift the dollar

A fifth negative session in six as falling oil prices ease inflation fears but fail to offset hawkish Fed signals. US PCE data due Thursday is the next key catalyst.

Source: Federal Reserve, US Treasury, Fars News Agency

• XAU/USD $4,050 ↓ 2-week low
• YTD Low $4,023 Key support level
• 4H RSI ~31 Near oversold
• 100-SMA (4H) $4,287 First resistance

Gold extended its decline for a second consecutive session on Wednesday, touching a near two-week low around $4,050 during Asian trading hours. The precious metal has now posted losses in five of the past six sessions, weighed down by a stronger US dollar that climbed to its highest level since May 2025.

The main driver behind the selloff is a sharp shift in Federal Reserve rate expectations. At last week's policy meeting, nine of the Fed's 19 policymakers signalled that they expect an interest rate hike in 2026. Fed Chair Kevin Warsh reinforced that message during the post-meeting press conference, stressing the importance of price stability and indicating there is no urgency to cut rates despite moderating economic growth. Markets have since priced in at least one 25-basis-point rate hike this year, boosting the US dollar and weighing on non-yielding assets such as gold.

Meanwhile, crude oil prices fell to their lowest level since early March after shipping traffic through the Strait of Hormuz partially resumed. An Iranian military source told Fars News Agency that a limited number of vessels are now being allowed to transit the waterway each day under coordination with Iran's Revolutionary Guards Navy. In addition, the US Treasury Department issued a temporary 60-day sanctions waiver authorising the production, delivery and sale of Iranian crude oil and petroleum products. While lower oil prices help ease inflationary pressures—normally supportive for gold as an inflation hedge—the stronger US dollar remained the dominant market force on Wednesday.

Geopolitical uncertainty also continued to linger. US Vice President JD Vance said Iran agreed during talks in Switzerland to allow IAEA inspectors access to its nuclear facilities, a claim later echoed by President Donald Trump. However, Iran's Foreign Ministry denied making any new nuclear commitments, leaving investors cautious and limiting safe-haven demand for gold. Attention now turns to the US Personal Consumption Expenditures (PCE) Price Index due on Thursday, the Federal Reserve's preferred measure of inflation, which could provide the market with its next major directional cue.

Key drivers

• US dollar at its highest level since May 2025.
• Nine of 19 Fed policymakers support a 2026 rate hike.
• Oil prices hit a March low as Strait of Hormuz traffic partially resumes.
• Mixed signals surrounding US-Iran nuclear negotiations.
• US PCE inflation data due on Thursday.

Sources: Federal Reserve June 2026 policy meeting, US Treasury Department, Fars News Agency. Technical levels are based on the 4-hour chart. For informational purposes only and not investment advice.