Gold Prices Slip as Stalled US-Iran Talks and Fed Rate Hike Bets Boost US Dollar
Gold prices came under renewed selling pressure after climbing toward the $4,590 region during the Asian trading session, halting the previous day’s modest rebound from the lowest level since March 30. Despite renewed hopes for a potential US-Iran peace agreement, investors remain cautious amid major disagreements over Tehran’s nuclear program and the Strait of Hormuz. At the same time, hawkish expectations surrounding the US Federal Reserve continue to strengthen the US Dollar, limiting upside momentum for non-yielding bullion.
From a technical perspective, gold remains below the 100-hour Simple Moving Average (SMA), keeping the short-term bearish outlook intact despite the recent recovery attempt. In addition, the Moving Average Convergence Divergence (MACD) indicator stays in positive territory, although its latest reading of 3.32 suggests weakening bullish momentum. Meanwhile, the Relative Strength Index (RSI) near 51.7 reflects moderate buying pressure rather than a strong bullish trend.
This setup suggests traders may wait for a confirmed break below the key psychological level of $4,500 and further selling beneath the overnight swing low near $4,480 before anticipating deeper losses. On the upside, immediate resistance is seen at the 100-hour SMA around $4,625.58. A sustained move above this barrier would be required to ease the current bearish bias and pave the way for a stronger recovery in gold prices.
US-Iran Tensions Continue to Drive Market Sentiment
US President Donald Trump stated on Monday that he postponed a planned strike on Iran following requests from Qatar, Saudi Arabia, and the United Arab Emirates. Trump also noted that formal negotiations are not currently underway, fueling cautious optimism over a diplomatic agreement that could eventually end the long-running conflict involving Iran.
However, market reaction has remained limited due to mixed geopolitical signals. Iranian President Masoud Pezeshkian responded to Trump’s warning that “time is running out” by insisting Iran would not surrender to external pressure. He added that Tehran entered talks with dignity, authority, and a commitment to protecting national rights.
On the other hand, Trump emphasized that he had instructed the US military to remain fully prepared for a large-scale strike against Iran if negotiations fail. These ongoing geopolitical risks continue to support the US Dollar’s safe-haven appeal.
Hawkish Fed Expectations Weigh on Gold Outlook
Meanwhile, financial markets have largely ruled out the possibility of Federal Reserve rate cuts for the remainder of 2026. Instead, traders are increasingly pricing in at least one interest rate hike before year-end as concerns over rising energy and consumer inflation intensify.
According to CME Group’s FedWatch Tool, markets are assigning nearly a 40% probability that the Federal Reserve will raise interest rates by 25 basis points during its December policy meeting. In addition, inflation worries and fiscal concerns have kept US 30-year Treasury yields near their highest levels since 2023, providing another supportive factor for the Greenback while reducing demand for gold.
Still, traders remain cautious ahead of the upcoming FOMC Minutes release on Wednesday, which could provide fresh insights into the Federal Reserve’s future monetary policy path and influence the direction of the XAU/USD pair.
Gold Outlook Remains Bearish Amid Stronger US Dollar
Looking ahead, market participants will continue monitoring developments surrounding the Middle East crisis, as any escalation could inject fresh volatility into global financial markets and revive safe-haven demand for gold.
Nevertheless, the broader fundamental backdrop currently favors bearish traders, suggesting that the path of least resistance for gold prices remains to the downside.