Gold Struggles Near $4,000 as Dollar Strength and Rate Bets Cap Recovery Amid Mideast Uncertainty]

Gold Struggles Near $4,000 as Dollar Strength and Rate Bets Cap Recovery Amid Mideast Uncertainty]

Gold (XAU/USD) edged up from its lowest level since November 2025, though the metal remains weighed down by a firm US Dollar and expectations of further Federal Reserve rate hikes. Despite finding support amid renewed tensions in the Middle East, the benchmark buck attracted buyers on dips amid increasing bets on tighter US monetary policy.

Reports indicated that the US and Iran agreed to a de-escalation following recent exchanges near the Strait of Hormuz, though both sides blamed each other for violating the ceasefire. US President Donald Trump noted on Truth Social that Iran requested a meeting in Qatar’s capital, Doha, though Iran’s deputy foreign minister denied any plans for such discussions this week. The uncertainty keepsgeopolitical premiums elevated and supports the dollar as a safe haven.

Fears of inflation sparked by the escalating hostilities, combined with the Fed’s hawkish stance, reinforced expectations for higher interest rates. According to the CME Group’s FedWatch Tool, markets are pricing in roughly a 63% chance of a rate hike by September and over an 80% odds of a move by year-end. This dynamic reinforces demand for the dollar while weighing on gold, which continues to trade below the $4,000 psychological floor.

Japanese Yen softened to a fresh four-decade low against the dollar, pressuring other precious metals. Market participants are awaiting Tuesday’s US economic releases, including the Conference Board’s Consumer Confidence Index and JOLTS Job Openings data. However, attention will center on Fed Chair Kevin Warsh’s upcoming speech Thursday at the European Central Bank’s forum in Sintra, Portugal. The much-anticipated nonfarm payrolls report later this month is also expected to provide cues on the Fed’s pace of policy tightening, influencing the dollar and, in turn, gold prices.

XAU/USD 4-hour chart

Gold bears turn cautious amid oversold RSI; downside potential intact below $4,000

Continued hurdles near the 100-period Simple Moving Average on the 4-hour chart suggest the recent attempt to stabilise has been tentative. With XAU/USD holding below $4,000, sentiment remains fragile. The MACD sits marginally below zero, signalling a pause in bearish momentum, while the RSI near 34 points to exhausted sellers but lacks conviction for a sustainable bounce. A lift through $4,000 faces initial resistance around $4,045, followed by the 100-period SMA at $4,180.34. Only a break above these levels would shift the near-term bias toward consolidation or modest upward extension.

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