Gold falls to its lowest level since late March as the US Dollar strengthens and expectations grow for a more hawkish stance from the Federal Reserve.

Gold remains under pressure on Wednesday, extending its decline as the US Dollar stays broadly stronger. Ongoing geopolitical tensions and increasing expectations of further Federal Reserve rate hikes continue to support the greenback near a six-week high. Investors are now awaiting the release of the FOMC Minutes for additional insight into the Fed’s future policy direction.

Gold (XAU/USD) extended its losses on Wednesday, falling to its lowest level since March 30 after briefly rising above the $4,500 mark during the Asian session. The precious metal remains under pressure as the US Dollar (USD) stays strong, supported by persistent geopolitical uncertainty, inflation concerns, and expectations of a more hawkish Federal Reserve (Fed).

Investor caution remains elevated amid uncertainty surrounding a potential US-Iran peace agreement. US President Donald Trump stated on Tuesday that the US could launch another strike on Iran if negotiations fail, noting that he had delayed a planned attack following requests from Gulf leaders. At the same time, Vice President JD Vance said both Washington and Tehran had made significant progress in talks and were seeking to avoid renewed military conflict. However, ongoing disagreements over Iran’s nuclear ambitions and the Strait of Hormuz continue to cloud the prospects for a diplomatic resolution. This uncertainty has reinforced the US Dollar’s safe-haven appeal, weighing further on Gold prices.

Additionally, tensions linked to the US-Iran standoff have kept Crude Oil prices close to monthly highs, fueling inflation worries and strengthening expectations for further Fed tightening. According to the CME FedWatch Tool, markets are now pricing in more than a 55% probability of at least one 25-basis-point rate hike in 2026. Philadelphia Fed President Anna Paulson also indicated that additional tightening could be appropriate if economic growth remains strong or inflation risks intensify. Rising US Treasury yields, driven by these expectations, have added further support to the Greenback while pressuring non-yielding assets such as Gold.

Despite the USD’s strength, traders remain cautious ahead of the release of the FOMC Minutes later in the North American session, which could offer fresh guidance on the Fed’s policy outlook. Further developments in the Middle East are also likely to influence market sentiment. Still, the broader fundamental backdrop continues to favor the US Dollar, suggesting that Gold prices may remain vulnerable to additional downside pressure, with any short-term rebounds likely to face renewed selling interest.

Gold Daily Chart

Gold appears set to extend its downward move below the key $4,500 psychological level.

From a technical standpoint, sustained trading beneath the $4,500 mark may serve as a fresh bearish signal and could pave the way for additional losses. Momentum indicators also continue to favor the downside, with the Relative Strength Index (RSI) remaining in the mid-30s and the Moving Average Convergence Divergence (MACD) staying in negative territory.

These signals suggest that bullish momentum is weakening, although Gold still finds support from the longer-term trend line near the 200-day Simple Moving Average (SMA), currently around $4,363.73. A clear break below this support zone could trigger a deeper correction, while maintaining levels above it may help XAU/USD stabilize and preserve its broader bullish trend despite the current weak momentum conditions.