Gold Retreats to One-Week Low as Stronger US Dollar Tests Bullish Momentum

Gold prices (XAU/USD) fell sharply on Thursday, sliding toward a one-week low as renewed US Dollar strength, driven by the Federal Reserve’s hawkish stance, weighed on the non-yielding metal. While safe-haven demand persists amid ongoing geopolitical tensions in the Middle East, the rising dollar has capped further upside for gold, keeping it locked within a short-term ascending channel.

---

🏛️ Fed’s Hawkish Pause Fuels Dollar Rebound, Pressures Gold

As expected, the Federal Reserve held interest rates steady this week. However, its updated projections signaled a slower rate-cut path, with only two cuts anticipated by the end of 2025, and just one each in 2026 and 2027. Notably, seven out of 19 Fed officials now expect no cuts in 2025, up from four in March. This shift reflects concerns that inflation could remain stubbornly high, possibly ending the year at 3%.

The US Dollar Index (DXY) has responded positively, rebounding from a three-year low to hit a one-week high, effectively dragging gold prices lower despite the heightened geopolitical backdrop.

---

🌍 Geopolitical Risks Limit Deeper Losses for Gold

Despite the dollar’s rise, gold’s downside remains cushioned by ongoing market uncertainty. Tensions in the Israel-Iran conflict continue to escalate, with President Trump reportedly authorizing military strike plans while weighing the risks of a prolonged war. The Israel Defense Forces (IDF) have issued evacuation warnings in central Iran, hinting at increased military operations and a wider regional crisis.

In addition, Trump’s push for new tariffs on the pharmaceutical sector and looming July trade deadlines add to global economic jitters—offering gold ongoing support as a safe-haven asset.

---

📊 Technical Outlook: Gold Approaches Channel Support

Gold is currently testing the lower edge of a short-term ascending trend channel, with technical indicators still favoring bulls — for now.

📉 Support Levels:

• $3,345: Key trendline support
• Break below could shift sentiment bearish and trigger a move lower

📈 Resistance Levels:

• $3,400: Immediate ceiling for buyers
• $3,434–3,435: Next upside barrier
• $3,451–3,452: Multi-week high
• $3,500: All-time high and channel top — a breakout here would ignite a bullish surge

As long as gold holds above $3,345, the uptrend remains intact. However, a confirmed daily close below this level would invalidate the current bullish structure and open the door for deeper retracement.

---

🔍 What to Expect Today

• US markets closed for Juneteenth, which may lead to lower liquidity and increased volatility
• No major US economic data scheduled
• XAU/USD likely to remain sensitive to USD movements and geopolitical headlines

---

🧠 Key Takeaways for DailyForex.pk Readers

• Gold slips to one-week low as hawkish Fed supports USD strength
• Geopolitical risks in the Middle East keep safe-haven bids alive
• $3,345 is a key trendline support to watch — a break could lead to further downside
• A bounce from current levels could aim for $3,434, then $3,500
• Traders should remain cautious amid low liquidity and headline-driven moves

---

📌 For real-time gold analysis, global market coverage, and expert technical insights, visit www.DailyForex.pk — your trusted hub for financial news and gold price forecasts.