Gold prices struggled to hold above the $3,400 mark on Tuesday, slipping lower after an initial bounce in the Asian session. A modest rebound in the US Dollar weighed on the precious metal, but ongoing geopolitical tensions and growing expectations of rate cuts later in 2025 are helping limit the downside.
đź’Ą Middle East Tensions Offer Support, But Bulls Hold Back
The safe-haven appeal of gold remains intact as the conflict between Israel and Iran enters a volatile fifth day. With aerial strikes intensifying and threats of a historic missile attack looming, markets remain on high alert. Reports of multiple oil tankers ablaze near the Strait of Hormuz have further added to fears of a broader escalation, sustaining demand for gold as a defensive asset.
Adding to the tension, US President Donald Trump left the G7 Summit early and has requested a special security briefing—signaling that the situation may be more serious than previously assessed.
💵 USD Climbs Slightly Ahead of Fed Decision — But Momentum Fades
The US Dollar edged higher ahead of the Federal Reserve’s two-day FOMC meeting, as traders rebalanced positions. Although this temporarily pressured gold, analysts caution that the dollar’s strength may be short-lived.
Markets are increasingly pricing in a rate cut by September, especially amid rising inflation concerns tied to Trump’s proposed tariffs. While the Fed is widely expected to keep rates unchanged in this meeting, the tone of Chair Jerome Powell’s press conference could steer both USD and XAU/USD direction in the coming weeks.
đź“Š Technical Outlook: Gold Still Holding the Uptrend
Despite a two-day pullback, gold remains inside a well-defined ascending channel on the daily chart. Positive momentum indicators continue to favor the bulls.
đź“Ś Key levels to watch:
- Support: $3,335–$3,340 (lower channel boundary)
- Resistance: $3,400 immediate hurdle
- Upside target: $3,434–$3,452 (multi-week high)
- Breakout zone: $3,500+ (April peak & channel top)
A sustained break below the $3,335 level would signal a potential short-term trend reversal, while a close above $3,452 could open the door for a retest of the $3,500 psychological zone.
đź“Ś Bottom Line for Traders
- Gold remains range-bound, but the bias leans bullish unless $3,335 breaks
- USD strength is fragile, hinging on Powell’s post-FOMC outlook
- Geopolitical instability continues to provide fundamental support for gold
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