Gold (XAU/USD) traded at $4,478 on Wednesday, staying below $4,500 and near seven-week lows around $4,480. The US Dollar Index (DXY) tested six-week highs near 99.45.
Geopolitical uncertainty linked to the US-Iran conflict and rising US yields have weighed on Gold over the past week. The focus is also on the minutes from April’s Federal Reserve meeting.
Fed Policy Expectations And Gold Pressure
The Fed kept rates unchanged last month, while three policymakers called for removing the “easing bias” line from the statement. Markets have increased expectations of a rate rise within the next 12 months, lifting Treasury yields and pressuring the non-yielding metal.
Gold fell more than 2.5% from Monday’s highs and retains a bearish near-term tone. The RSI is near oversold on the 4-hour chart, while the MACD histogram remains negative.
Support was seen near $4,450, with downside levels at $4,420 (March 30 low) and $4,350 (March 26 low). A move back above $4,480–$4,500 could reduce bearish pressure and shift attention to $4,590 (Monday’s high).
Central banks added 1,136 tonnes of Gold worth around $70 billion in 2022, the World Gold Council reported. This was the highest annual purchase since records began.
Dollar Dominance And Derivatives Positioning
Given the weakness in gold, we see the US Dollar as the dominant force for now. Gold’s inability to hold the $4,500 level suggests that bearish positions may be favorable in the immediate term. For derivative traders, this could mean looking at put options or selling call spreads to capitalize on further downside or capped upside.
The upcoming minutes from the Federal Reserve’s April meeting are the most critical event on our horizon. Since recent US inflation data for April 2026 came in slightly hotter than expected at 3.6%, the market is pricing in a hawkish stance. Any confirmation of this in the minutes will likely push US yields and the dollar higher, putting more pressure on gold prices.
Interestingly, the US-Iran geopolitical tensions are boosting the dollar more than gold, treating the currency as the primary safe haven. We saw a similar dynamic during the market uncertainty of early 2025, where initial crisis flows went directly into the dollar. This trend suggests gold’s traditional safe-haven appeal is temporarily being overshadowed.
From a technical standpoint, the next key levels to watch are the support zones around $4,450 and then down to $4,420. Traders could consider buying puts with strike prices near these targets to play a potential break lower. On the other hand, selling out-of-the-money calls above the $4,590 resistance might be a viable strategy to collect premium, betting that a significant rally is unlikely.
However, we should remain mindful of the strong underlying demand from central banks, which continue to be major buyers. A recent World Gold Council report showed net purchases of 85 tonnes in the first quarter of 2026, confirming this long-term supportive trend. Any dovish surprise from the Fed or a sudden de-escalation of geopolitical conflict could cause a sharp reversal and squeeze short positions.
