Last Updated on 15/07/2026
- Gold stays under selling pressure as a firmer US Dollar and higher oil prices strengthen expectations of a hawkish Federal Reserve.
- The upcoming US CPI report and the Fed Chair’s testimony are expected to provide the next key catalyst for gold prices.
- Mounting bearish momentum leaves gold vulnerable to a break below the $4,000 mark.
Gold and silver came under heavy selling pressure during the first half of Monday’s trading session. Gold extended last week’s weakness after failing to build on the modest rebound seen the previous week. The broader trend remains bearish. Although the precious metal is still marginally positive for the month, it plunged more than 11% in June, marking its fourth straight monthly decline.
As a result, downside risks continue to dominate, with gold increasingly vulnerable to a break below the key $4,000 support level in the near term.
Rising Oil Prices Keep Pressure on Gold
Renewed geopolitical tensions in the Middle East have driven crude oil prices higher at the start of the week, weighing on global equity markets. While geopolitical uncertainty would typically increase demand for safe-haven assets such as gold, the metal has increasingly moved alongside US equities in recent years, reflecting its growing sensitivity to broader market sentiment rather than its traditional defensive role.
If oil prices continue to climb, inflation concerns are likely to intensify, reinforcing expectations that the Federal Reserve will maintain a restrictive monetary policy. Such a scenario would further weaken gold’s near-term outlook.
Stronger US Dollar Adds to Headwinds
Gold is also facing pressure from a strengthening US Dollar. With the Fed emphasizing its commitment to keeping inflation under control, another surge in energy prices could strengthen expectations that US interest rates will remain elevated for longer. Even if upcoming economic data shows some moderation, persistently high energy costs would likely discourage policymakers from shifting toward a more dovish stance.
This backdrop has helped the US Dollar regain momentum, particularly against currencies such as the euro and Japanese yen, whose economies are more vulnerable to rising energy import costs.
Focus Turns to CPI and Fed Chair Testimony
As oil and natural gas prices remain elevated, markets have become less willing to dismiss the possibility of additional Fed tightening, providing further support for the Greenback while reducing gold’s appeal.
Investor attention now shifts to a busy US economic calendar. Tuesday’s Consumer Price Index (CPI) report is expected to show softer monthly headline inflation, but firm energy costs and stubborn core inflation—still around 2.8% to 2.9% year-over-year—suggest the Fed could still consider another rate increase before year-end.
Markets will also closely monitor Fed Chair Kevin Warsh’s two-day congressional testimony for fresh guidance on the policy outlook. Additional releases, including producer prices, import prices, and retail sales, could further influence market expectations.
Gold Technical Outlook
Technically, gold has repeatedly failed to reclaim the $4,100 level, remaining below both a descending trendline and the 21-day Exponential Moving Average (EMA). The metal is now approaching the critical $4,000 support zone ahead of the US CPI release.
A decisive daily close below $4,000 would likely confirm a bearish breakdown, opening the door toward $3,900, with $3,800 emerging as the next major downside target.
On the upside, initial resistance is located near $4,136, followed by $4,200 and then $4,275.
With energy prices remaining elevated and the US economy showing limited signs of slowing enough to ease inflation concerns, the broader macro backdrop continues to favor the US Dollar. Consequently, non-yielding and low-yielding assets—including gold, the Japanese yen, and the Swiss franc—remain exposed to further downside pressure.
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