Gold is holding steady just below the $4,700 level during the early European session, showing some strength despite ongoing pressure. The main reason behind this weakness is a stronger US Dollar, which has been gaining for three consecutive days and continues to weigh on the metal. Ongoing tensions between the United States and Iran—particularly around the Strait of Hormuz and the US naval blockade—are also supporting the dollar. At the same time, reduced expectations of further interest rate cuts from the Federal Reserve are adding to the USD’s strength, putting additional pressure on gold prices.
Although US President Donald Trump recently extended a temporary ceasefire with Iran, markets remain cautious. Investors are not fully convinced that tensions will ease, especially with no real progress in negotiations. Iran has made it clear that the removal of the US naval blockade is a key condition for talks to resume, while recent actions by the Islamic Revolutionary Guard Corps, including the seizure of two container ships, have increased concerns about further escalation. These developments are keeping geopolitical risks elevated and continue to support the US Dollar’s safe-haven appeal.
At the same time, disruptions in energy supply through the Strait of Hormuz are keeping crude oil prices high, which is pushing global inflation higher. This situation is leading to expectations that central banks, including the Federal Reserve, may maintain a more cautious or even hawkish approach. Even though the Fed has hinted at one rate cut this year, strong economic data and persistent inflation are making policymakers more hesitant. This reduces the appeal of gold, which does not offer interest, and encourages investors to move toward the dollar instead.
From a technical perspective, gold is trading near the lower end of an upward trend channel, suggesting a neutral short-term outlook. The Relative Strength Index (RSI) is around 39, indicating weakening momentum but not yet oversold conditions. The MACD indicator also remains negative, showing that bullish momentum is still limited.
If gold falls below the $4,700 level and breaks the key support near $4,691, it could lead to further downside toward the $4,568 area. On the other hand, if buyers manage to push prices above the resistance around $4,926, it could signal a return of bullish momentum and open the door for further gains.
