Last Updated on 15/07/2026
Gold drifts lower as the market’s initial response to Tuesday’s softer-than-expected US inflation data loses momentum. Persistently high oil prices continue to fuel expectations of at least one additional Federal Reserve rate hike, weighing on the non-yielding metal. Meanwhile, escalating tensions between the US and Iran could boost demand for the safe-haven US Dollar, adding further downside pressure to XAU/USD.
Gold (XAU/USD) comes under renewed selling pressure after failing to sustain gains above the $4,100 level in the previous session, though it continues to hold above the key $4,000 psychological support during Wednesday’s Asian trading hours. While softer-than-expected US Consumer Price Index (CPI) data initially weighed on the US Dollar (USD), persistent concerns over energy-driven inflation continue to dominate sentiment. Escalating tensions between the US and Iran, along with the closure of the Strait of Hormuz, have kept crude oil prices elevated, reinforcing inflation fears. Meanwhile, Federal Reserve (Fed) Chair Kevin Warsh reaffirmed the central bank’s commitment to restoring price stability during his first congressional testimony, signaling that another rate hike remains possible before year-end. The hawkish tone largely offsets the impact of a weaker USD and limits demand for the non-yielding precious metal.
Data released by the US Bureau of Labor Statistics showed headline CPI fell by 0.4% in June, marking the steepest monthly decline since April 2020 and falling short of expectations for a 0.1% decrease. Core CPI, which excludes food and energy prices, was unchanged during the month, well below the expected 0.3% increase. On an annual basis, headline inflation eased to 3.5%, while core inflation slowed to 2.6%, both undershooting market forecasts. The softer inflation figures briefly dragged the USD to its weakest level in nearly four weeks as traders pared back expectations for additional Fed tightening. However, the Greenback quickly recovered after Warsh emphasized that the Fed remains firmly committed to combating inflation and highlighted the resilience of the US economy.
At the same time, crude oil prices have climbed to their highest level in nearly a month, increasing concerns that higher energy costs could reignite inflationary pressures and justify further monetary tightening. Reflecting this outlook, the CME FedWatch Tool indicates that markets continue to price in the possibility of one additional Fed rate hike, potentially in September or December. Geopolitical tensions also continue to underpin the USD’s safe-haven appeal. The US carried out another wave of airstrikes on Iranian targets, while Tehran responded by attacking US military facilities across Gulf nations. In addition, President Donald Trump warned that Washington could target Iranian bridges and power infrastructure if Tehran refuses to resume nuclear negotiations.
Overall, the prevailing fundamental backdrop remains supportive of the US Dollar and suggests that downside risks for Gold persist. Investors now await the release of the US Producer Price Index (PPI) and the second day of Fed Chair Kevin Warsh’s congressional testimony for fresh clues on the interest rate outlook. Meanwhile, any new developments in the Middle East conflict are likely to remain a key driver of market sentiment and could trigger heightened volatility across financial markets, particularly in Gold.
Technical Analysis
From a technical perspective, Gold continues to trade within a descending parallel channel and remains firmly below the 200-day Simple Moving Average (SMA), indicating that the broader trend remains tilted to the downside despite the recent recovery. The Moving Average Convergence Divergence (MACD) has crossed into positive territory and continues to improve, signaling a modest pickup in bullish momentum, while the Relative Strength Index (RSI) hovers near the neutral 40.80 mark, suggesting limited buying conviction.
The upper boundary of the descending channel, located around $4,140.69, represents the first significant resistance level. A sustained break above this barrier would be required to weaken the prevailing bearish outlook and open the door for additional gains. On the downside, immediate support is seen near the channel’s lower boundary at $3,718.03. A decisive rebound from this level would be needed to indicate that bearish momentum is fading and that sellers are beginning to lose control of the short-term trend.
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