On Thursday, the U.S. launched fresh air attacks at Iran, leading Tehran to respond with a wave of strikes on sites across the Persian Gulf, in the latest round of tit-for-tat fire that has threatened to derail an already shaky ceasefire agreement.
Exchanges of strikes, followed by a tenuous halt to hostilities, have become a recurring cycle since the signing of the framework truce in June, leaving the efficacy of the deal mired in uncertainty. Both sides have accused each other of violating the agreement.
On Wednesday, soon the President Trump said the ceasefire between the two was now “over” and that he did not want to deal with Iran anymore while briefing to reporters after a summit of the North Atlantic Treaty Organization (NATO) in Türkiye, experienced a steep slide that pushed the futures to test the lows at $4,032.56, just above the key support at $4,030.51, and closed the day at $4,082.24.
Meanwhile, Minutes from the Federal Reserve’s June meeting also offered some support to gold after revealing policymakers were divided over the need for additional interest rate hikes, raising expectations that borrowing costs could ease later this year. Lower interest rates tend to benefit non-yielding bullion by reducing its opportunity cost.
However, the minutes also underscored growing concern among Fed officials over persistent inflation. U.S. price pressures have accelerated since the outbreak of the U.S.-Iran conflict in late February and remain well above the central bank’s 2% target, suggesting policymakers may be cautious about cutting rates too quickly.
Technical Levels to Watch
On Thursday, after opening the day at $4,085.90, gold futures tested the day’s high at $4,145.40, just above the resistance faced by gold futures yesterday, after testing the day’s low at $4,063.40, gold futures are trading at $4,138, raising doubts over the strength today, as I have discussed the reasons behind persisting bearish sentiments in details while I wrote my previous article.
On a daily chart, though, gold futures are trying to hold the key support at $4,125.61but facing significant bearish pressure below the immediate resistance at $4,144.72, as Energy-Driven Inflation Keeps Bearish Pressure Intact, while U.S. Treasury yields held near multi-week highs while eurozone yields held near their highest levels in a month on Thursday, following a dramatic escalation of geopolitical tensions in the Middle East.
On 1-Hr. chart, despite sustaining above the key support at the 200 EMA ($4,117.92) since last three hours, gold futures finding it difficult to sustain above the key resistance at $4,144.72, as the formation of a bearish hourly candle, currently keeping the futures at $4,137, signalling advent of a selling spree during the last six hours, as the 100 EMA is still below the 200 EMA, forming a “Bearish Crossover” on hourly charts.
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Disclaimer: Readers are advised to take any position in gold at their own risk, as this analysis is based solely on observations.
