Gold prices are having a tough time gaining strength as a general risk rally lowers the need for safe-haven assets. The news of a ceasefire between Israel and Iran has made riskier investments more appealing, leading gold to stabilize at around $3,325 during European trading hours. Jerome Powell, from the Federal Reserve, stated that current monetary policy is suitable despite uncertainties tied to tariffs. His comments have reduced expectations for an interest rate cut in the upcoming July meeting, putting additional pressure on gold prices, as higher interest rates usually hurt non-yielding assets.

Technical Analysis Of Gold

On a daily chart, gold is forming an Ascending Triangle, indicating reduced volatility. The gold price is currently below the 20-day Exponential Moving Average, suggesting a bearish trend in the short term, while the 14-day Relative Strength Index shows a sideways movement. If gold breaks above $3,500, it might enter new territory, facing resistance at $3,550 and $3,600. However, if it drops below $3,245, the price may fall to $3,200, with additional support at $3,121. Central banks continue purchasing gold to diversify reserves and enhance economic trust, especially in uncertain times. While the short-term outlook for gold seems dull, it mainly reflects a change in broader market risk preferences. With easing tensions in the Middle East due to confirmed efforts to halt hostilities, investors are slowly moving away from traditional safety assets. Riskier investments are returning to portfolios, reducing gold’s appeal and impacting its prices. Powell’s comments about policy stability, just before summer central bank decisions, have dampened market excitement about a near-term rate cut. His steady tone, even amid possible trade disruptions, suggests that those hoping for a rate cut may need to wait longer. This policy stability, even if not strongly hawkish, raises the challenge for gold to recover. Historically, real yields and gold do not pair well: as the cost of holding gold rises, demand decreases.

Gold’s Market Outlook

Looking at the charts, the situation is clearer than it seems. Prices are caught in a narrowing range. The Ascending Triangle indicates underlying tension, suggesting energy is building for a future breakout. However, until the upper resistance is broken, it simply points to uncertainty. The immediate theme looks more like consolidation than reversal or breakout. Momentum indicators, particularly the drifting RSI, support this idea. There’s no urgency in the current technicals. However, key levels persist. If gold can break decisively above the $3,500 barrier, new flows may enter, especially from funds that have been inactive since March. Higher levels, such as $3,550 and $3,600, will require fresh catalysts to maintain any gains. On the downside, the scenario evolves more quickly. If the price falls below $3,245, it could drop swiftly to $3,200, and if it loses that, it may continue down to $3,121, where long-term buyers have previously stepped in. Beyond the charts, underlying demand is noteworthy. Central banks are steadily accumulating gold—not out of fear, but with quiet determination. Their purchases serve two purposes: diversifying reserves and projecting financial stability. Though these flows might not influence immediate prices, they shape the market’s underlying structure. While they can’t prevent all pullbacks, they gradually tighten support. Ultimately, our approach to positioning will depend on monitoring pressure points above and below, responding to both geopolitical signals and policy expectations. We should remain agile. While the tempo might be building, the next move’s direction hasn’t yet revealed itself. We need to be prepared for any outcome without making assumptions about certainty. Create your live VT Markets account and start trading now.

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