Gold prices remained under pressure during the Asian trading session, hovering around the $4,470 region after touching their lowest level since March 30 earlier on Wednesday. The precious metal continues to struggle amid renewed strength in the US Dollar, as investors remain skeptical about the prospects of a lasting US-Iran peace agreement. Persistent inflation concerns and expectations of a more hawkish Federal Reserve are also helping the Greenback maintain its recent rally near a six-week high, weighing heavily on bullion prices.
From a technical perspective, sustained trading below the key psychological $4,500 level could act as a fresh bearish trigger and increase the likelihood of further downside movement. Momentum indicators are also weakening, with the Relative Strength Index (RSI) holding in the mid-30s and the Moving Average Convergence Divergence (MACD) remaining in negative territory.
Despite the bearish momentum, gold prices continue to find support near the long-term trendline represented by the 200-day Simple Moving Average (SMA) around $4,363.73. A decisive break below this critical support level could open the door for a deeper correction. On the other hand, holding above the 200-day SMA may allow XAU/USD to consolidate within its broader uptrend, even as short-term momentum remains weak.
US President Donald Trump stated on Tuesday that the United States could potentially launch another strike against Iran if negotiations fail. Trump revealed that he had come within an hour of authorizing military action before delaying the decision following requests from three Gulf leaders. Meanwhile, Vice President JD Vance noted that both Washington and Tehran had made significant progress in ongoing talks and expressed that neither side wanted to see a renewed military campaign.
However, doubts surrounding a long-term diplomatic solution to the Iran conflict continue to persist due to major disagreements over Tehran’s nuclear program and the strategic Strait of Hormuz. This ongoing uncertainty continues to support the US Dollar’s status as a safe-haven reserve currency, creating additional headwinds for gold prices.
At the same time, tensions linked to the US-Iran standoff have kept crude oil prices elevated near monthly highs, fueling inflation concerns and strengthening speculation that the Federal Reserve could maintain higher interest rates for longer. According to the CME Group FedWatch Tool, traders are now pricing in more than a 55% probability that the Fed could raise interest rates by at least 25 basis points in 2026.
This outlook was reinforced by comments from Philadelphia Fed President Anna Paulson, who suggested that additional rate hikes could become appropriate if economic growth exceeds expectations or inflation risks intensify. Rising US Treasury yields have further strengthened the dollar, adding more pressure on non-yielding assets such as gold.
Still, USD bulls appear cautious ahead of the release of the upcoming FOMC meeting minutes during the North American session, which could provide fresh clues regarding the Federal Reserve’s future policy path. In addition, further developments surrounding the Middle East crisis may influence demand for safe-haven assets like gold.
Nevertheless, the broader fundamental backdrop continues to favor the US Dollar, suggesting that the path of least resistance for gold prices remains tilted to the downside. Any short-term recovery attempts are therefore likely to face selling pressure and may struggle to gain sustained momentum.