On June 26, the US-Iran conflict reaches its 119th day, and Israel continues to attack southern Lebanon on Friday as Israeli Prime Minister Benjamin Netanyahu pledges that the Israeli military is “not going to withdraw” from occupied areas.
Israel currently occupies about one-fifth of Lebanon. The interim US-Iran peace accord – also being referred to as the Memorandum of Understanding (MoU) – gives inspectors from the International Atomic Energy Agency (IAEA) access to Iran, the agency’s chief, Rafael Grossi, said, after Tehran indicated that key sites would remain off-limits until a final deal with Washington is reached and sanctions are lifted.
The UN International Maritime Organization (IMO) paused its operation to escort ships through the Strait of Hormuz on Thursday after a vessel reported an attack, reigniting concerns about whether a preliminary deal to end the Iran war will hold. The cargo ship said it was hit close to Oman by a projectile, the British Navy agency UKMTO said.
These developments occur alongside progress on the interim peace accord between the United States and Iran, which seeks to end the US-Israel conflict with Iran that began on February 28.
Last Tuesday, the United States Senate voted in favour of invoking its war powers to force President Donald Trump to halt his military campaign against Iran or seek congressional approval before any further action is taken.
A similar measure had already been approved in the House of Representatives on June 3 by a vote of 215 to 208, and on Tuesday, the Senate passed it in a 50-48 vote. Trump’s Republican Party has slim majorities in both chambers.
Undoubtedly, this war against Iran has proved highly unpopular in the US. A poll released on Tuesday by the news agency Reuters and the research firm Ipsos found that 24 percent of respondents felt the war had been worth the cost.
The vote took place because the Constitution, supplemented in part by the War Powers Resolution, entrusts the war power exclusively to Congress and prohibits presidential wars like the one in Iran. That means the president is not supposed to start a war on his own, like a war against Iran, without the approval of Congress.
The War Powers Resolution “directs the President to remove United States Armed Forces from hostilities against the Islamic Republic of Iran”.
Only if “explicitly authorised by a declaration of war or a specific congressional authorisation” would Trump be allowed to use further military force against Iran, it says.
The resolution, however, does allow for a limited military presence to remain in the Middle East to prevent any “imminent attack” against the US or its allies.
Technically, the Trump administration should now seek explicit congressional approval for further strikes on Iran. However, previous administrations have found routes around this by securing more limited authorisations for the use of military force (AUMFs) instead.
In addition, a resolution does not have the force of law. Experts said, therefore, that while the Senate vote is viewed as a rebuke to Trump, it is largely symbolic.
Before the vote on Tuesday, some Republican senators had warned that the war powers resolution would weaken Trump’s standing in the Switzerland negotiations next week.
Trump has pointed to that precedent to argue that he does not need congressional authorization at all.
In an appearance on The Axios Show last week, Trump denied learning any “lesson” about the limits of his executive powers during the Iran war. “There are no limits,” he said.
Meanwhile, the Council on American-Islamic Relations (CAIR) has urged the US and other countries to impose sanctions on Israel, after a UN inquiry found that the Israeli military continues to deliberately target and kill Palestinian children in Gaza and the occupied West Bank.
The U.S. dollar remained steady near a 13-month high and was headed for a second straight weekly gain, making gold more expensive for holders of other currencies.
The greenback has been supported by rising expectations that the Fed may need to tighten policy further as inflation remains elevated.
Data released on Thursday showed the U.S. personal consumption expenditures (PCE) price index, the Fed’s preferred inflation gauge, rose 4.1% in May from a year earlier, the highest reading in more than three years and the first above 4% since 2023.
Markets currently see a 63% chance of a Fed rate increase by September, according to the CME Fed Watch tool.
Higher interest rates typically reduce the appeal of bullion because it offers no yield.
Limiting losses, investors continued to monitor developments in the Middle East after a cargo vessel reported an attack near the Strait of Hormuz, highlighting lingering geopolitical risks despite a preliminary U.S.-Iran peace agreement.
However, Bullion-backed exchange-traded funds could face renewed outflows if investors continue to increase their bets on interest rate hikes, analysts say — a factor that could pull already-falling gold prices lower.
prices slipped below a key psychological level of $4,000 per ounce for the first time since November 2025 on Wednesday, under pressure from a firmer U.S. dollar and growing expectations that interest rates will remain elevated.
World Gold Council data shows gold-backed ETFs recorded net outflows of 16 metric tons in May and continued to see outflows in the first half of June, although funds last week registered their strongest weekly net inflows since mid-April.
“While recent inflows suggest selling pressure may be easing, ETF demand is likely to remain less supportive than it was in 2025,” analysts at ING said.
Standard Chartered, in a note, said that at current price levels, more than 200 tons of gold in exchange-traded funds are in loss-making territory.
However, rising energy prices in the wake of the Iran war have fuelled inflation concerns, leading central banks, including the Fed, to adopt a more hawkish tone and investors to scale up bets on rate hikes, rather than cuts.
Analysts say that while softer ETF demand could weigh on bullion in the near-term, central bank purchases — another key driver behind gold’s rally last year — are likely to remain a key source of support.
On Friday, gold futures, after opening the day at $4,029.85, tested the day’s high at $4,069.55 and day’s low at $3,998.65, and are trading at $4,064.20, trying to defend the immediate support at $4,035.38, where a breakdown could push the futures to test the next support at the low, tested in November 2025.
Undoubtedly, Friday’s closing level will define further directional moves, but the monthly candle for this month looks extremely bearish, which is likely to continue selling pressure ahead.
Disclaimer: Readers are advised to take any position in gold at their own risk, as this analysis is solely based on observations.
