The U.S. dollar strengthened as markets continued to price in the possibility of a Federal Reserve rate hike in September, despite softer U.S. inflation data. Investors remain cautious, believing that inflation risks have not completely disappeared.
Meanwhile, geopolitical tensions between the United States and Iran continue to escalate. Markets are closely monitoring whether the conflict will intensify after Iran threatened retaliation against key U.S. interests in the Middle East if Washington expands its military operations.
A prolonged conflict could disrupt global energy supplies and drive crude oil prices higher, potentially reigniting inflationary pressures. If inflation expectations remain elevated, the Federal Reserve may maintain its hawkish policy stance or even consider another rate hike in September. This environment continues to support the U.S. dollar while limiting upside potential for gold.
Technical Analysis
1D
The U.S. Dollar Index remains in a confirmed uptrend on the daily timeframe, supported by a clear higher high–higher low market structure. Price continues to trade above both the 50-day and 200-day Simple Moving Averages (SMA), confirming that the medium-term bullish trend remains intact.
The index is currently retesting a former resistance zone that has turned into support. As long as this area holds, buyers are likely to remain in control, with the next bullish target located at the May high around 101.965.
1D
Gold continues to trade below both the 50-day and 200-day SMAs, confirming that the broader trend remains bearish. Selling pressure continues to dominate, while recent price action appears to be a temporary consolidation rather than a confirmed trend reversal.
Unless buyers manage to reclaim the major moving averages, the overall outlook remains biased to the downside.
GOLD 4H
On the 4-hour timeframe, gold continues to form lower highs and lower lows while trading inside a well-defined bearish channel below both the 50- and 200-period SMAs. This confirms that sellers remain in control of the market.
In the short term, gold may experience a technical pullback toward the 4,020–4,040 resistance zone. This area is reinforced by several technical confluences, including:
- Previous support turned resistance
- 50%–61.8% Fibonacci retracement (Premium Zone)
- Descending trendline resistance
- Dynamic resistance from the 50-period SMA
As long as price remains below this confluence area, any upward movement is likely to be corrective rather than the beginning of a bullish reversal. The medium-term downside target remains around 3,886.090.
Conclusion
Gold remains under pressure as both fundamental and technical factors continue to favor the U.S. dollar. Persistent expectations of a hawkish Federal Reserve, combined with rising geopolitical tensions that could fuel higher oil prices and inflation, continue to support the dollar’s strength.
From a technical perspective, DXY maintains a bullish structure, while gold remains firmly within a bearish trend on both the daily and 4-hour timeframes. Unless gold breaks above the key resistance confluence around 4,020–4,040, any short-term rally is likely to be viewed as a selling opportunity, with the broader bearish outlook remaining unchanged.
Disclaimer : This analysis is provided for educational and informational purposes only and should not be considered financial or investment advice. Financial markets involve significant risk, and past performance does not guarantee future results. Always conduct your own analysis and manage risk appropriately before making any trading decisions.
