**Gold Price Influences** The US Dollar plays a major role in the global economy, with its value affected by the Federal Reserve’s monetary policy. The Fed can use tools like quantitative easing and tightening during economic changes. The information provided is for your knowledge, but it’s essential to do your own research before making any trading decisions due to the risks involved. Powell’s testimony raised concerns for policymakers: inflation could rise again if interest rates are cut too quickly. He emphasized the need to control price increases, suggesting a cautious approach. Despite some positive data, there’s no hurry to ease monetary policy. However, small changes in economic risks have already led traders to adjust their expectations. We can see this shift in interest rate futures, where the chance of a July cut rose notably after Powell’s comments. **Geopolitical Cooling Effects** Many factors have contributed to gold’s decline, especially the cooling geopolitical tensions. The ceasefire between Israel and Iran has reduced fears of disruptions in important shipping routes. The Strait of Hormuz, a major path for global oil flow, had previously been a point of concern. Disruptions there often lead to higher oil prices, which can raise inflation expectations. With tensions easing, the need to hold gold as a safeguard has decreased. Additionally, crude oil prices dropped after the de-escalation, supporting this view. As XAU/USD stays around $3,300, traders are focusing on technical aspects. The support at the 23.6% Fibonacci level is holding, but the 50-day exponential moving average is flattening, indicating a slowing momentum. Traders are adjusting their positions, preferring shorter-duration contracts while keeping hedged deals around this crucial price level. Intraday volatility has decreased, signaling that the markets are in a wait-and-see period. This situation highlights the importance of the upcoming inflation data. With CPI figures due soon, market volatility could rise again. If core inflation remains high or unexpectedly increases, it will be tougher for Fed officials to support easing policies without losing credibility. In that case, interest rate-sensitive assets—like gold and USD-linked derivatives—could experience sharper movements. Create your live VT Markets account and start trading now.

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