Gold Rebounds Toward $4,100 but Struggles to Gain Momentum Amid Inflation Concerns
Gold prices rebounded toward the $4,100 level on Thursday, snapping a three-day losing streak. However, the recovery remained limited as renewed geopolitical tensions in the Middle East reignited global inflation concerns, reducing expectations for aggressive monetary policy easing by major central banks.
The XAU/USD pair traded around $4,056, maintaining a bearish short-term outlook as spot gold remained below the 20-day Exponential Moving Average (EMA) at $4,149.09. Trading beneath this key technical indicator suggests that bullish momentum remains weak despite the latest rebound.
Meanwhile, the Relative Strength Index (RSI) stood at 40.11, remaining in mildly negative territory. Although the indicator does not point to oversold conditions, it continues to signal persistent selling pressure in the gold market.
On the upside, immediate resistance is located at the 20-day EMA of $4,149.09. A sustained breakout above this level would be needed to ease the current bearish sentiment and could open the door for a move toward the $4,200 resistance area.
On the downside, if gold falls below the June 30 low of $3,941.76, the precious metal could extend its decline toward the $3,800 support zone.
Fed Rate Expectations Shift as Inflation Risks Rise
Market participants have increasingly priced in the possibility of persistent inflation, according to the CME FedWatch Tool. The probability that the Federal Reserve will leave interest rates unchanged this year declined to 14.9%, down from 19.4% recorded on Tuesday, reflecting growing expectations that policymakers may need to maintain a hawkish stance.
Geopolitical tensions also continued to influence investor sentiment. On Wednesday, the US Central Command confirmed it had launched fresh military strikes against Iran aimed at keeping the Strait of Hormuz—a critical shipping route for nearly 20% of global energy supplies—open for international transit.
The renewed military action followed US President Donald Trump's announcement that the memorandum of understanding (MoU) signed with Iran to end the Middle East conflict was no longer in effect, further escalating uncertainty across global financial markets.
Looking ahead, investors will closely monitor upcoming US economic data for fresh evidence on inflation trends and their potential impact on the Federal Reserve's monetary policy outlook.
Minutes from the Federal Open Market Committee (FOMC) June policy meeting, released on Wednesday, revealed that policymakers continue to view inflation as the primary economic risk. Several Fed officials also indicated that additional monetary tightening could still become necessary if inflation remains persistently above the central bank's long-term target.