Gold finds it difficult to attract strong buying interest during Thursday’s Asian trading session. Persistent inflation concerns continue to support expectations of further Federal Reserve rate hikes, weighing on the precious metal. However, ongoing weakness in the U.S. dollar helps cushion the downside and prevents a sharper decline in gold prices.
Gold Holds Above $4,100 Despite Rising Rate-Hike Expectations
Gold (XAU/USD) remained above the $4,100 level during Thursday’s Asian session, stabilizing after retreating slightly from a two-week high reached earlier this week. The precious metal is facing pressure from rising U.S. Treasury yields, as escalating tensions between the United States and Iran have pushed oil prices to their highest level since June, fueling concerns about inflation and strengthening expectations of additional Federal Reserve rate hikes.
The geopolitical conflict continues to intensify, with the U.S. and Iran exchanging strikes for a twelfth consecutive night. Meanwhile, Yemen’s Houthi forces have announced a blockade of a key Red Sea shipping route, adding to disruptions in global energy supply chains. Combined with reduced traffic through the Strait of Hormuz, these developments have driven crude oil prices higher and increased fears that energy-driven inflation could force central banks to maintain a more hawkish policy stance.
Market participants are now assigning a high probability to at least one Fed rate hike before year-end, supporting elevated Treasury yields and weighing on non-yielding assets such as gold. Nevertheless, ongoing weakness in the U.S. dollar has provided some support for bullion, helping limit downside pressure and keeping the broader short-term uptrend intact.
Analysts note that investors have become increasingly aggressive in pricing future Fed tightening, reinforcing the recent rise in real yields and broader bond market weakness. As a result, gold is caught between safe-haven demand stemming from geopolitical uncertainty and the negative impact of higher interest rate expectations.
Looking ahead, traders will closely monitor U.S. Initial Jobless Claims data and the European Central Bank’s policy decision for fresh market direction. Any further escalation in the Middle East conflict is also likely to remain a key driver of gold price movements in the near term.
Technical Analysis
Gold’s recent rally appears to be losing momentum near the critical $4,155–$4,165 resistance zone, where the 200-period EMA on the 4-hour chart converges with the 23.6% Fibonacci retracement of the April–June decline. This area has emerged as an important technical hurdle that bulls must overcome to sustain the upward move.
Despite the resistance, momentum indicators remain constructive. The RSI is holding around 63, indicating continued buying interest without entering overbought territory, while the MACD remains in positive territory, suggesting that bullish momentum is still intact. However, strong overhead supply is preventing buyers from gaining full control.
A decisive breakout above the $4,155–$4,165 region would strengthen the bullish outlook and could pave the way for a move toward the next major resistance near the 38.2% Fibonacci retracement level around $4,304. Such a development would signal renewed upside momentum and attract additional buying interest.
On the downside, the key support level remains around $3,941, which serves as the primary Fibonacci anchor for the current recovery. If gold experiences a deeper correction, this zone could attract fresh demand and provide a foundation for a more sustainable advance in the longer term.
Overall, gold remains in a cautiously bullish technical structure, but a clear break above the $4,165 resistance area is needed to confirm the next leg higher. Until then, traders may continue to see consolidation within the current range.
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