FX.co ★ Retired-Mogambo | XAU/USD, GOLD

On Thursday, gold continued to drop, setting a lower daily high of $4,330 and a lower low of $4,201. Following a notable breakthrough below the 200-day moving average and uptrend line on June 5, this bearish reaction comes after the first pullback to test resistance. Wednesday's high of $4,382 served as resistance, sparking a one-day negative reversal day that continued on Thursday to complete a 50% retracement of the previous rally at $4,207. The 61.8% Fibonacci retracement of the previous rise at $4,164 and the 78.6% Fibonacci retracement at $4,102 become the next downside targets if Thursday's bottom fails as support. Numerous additional signs that demonstrate support in that area support that lower level. Given this price behavior, it is evident that gold is still in a downtrend structure, with sellers maintaining overall control. However, buyers regained control and pulled the price back up after the current lower swing low of $4,023 just momentarily fell below the previous swing low of $4,098. The midline of a falling trend channel, the 61.8% Fibonacci retracement of the previous advance, the completion of a 100% projected target for a falling pattern, or bearish measured moves are some of the signs that validate the support zone. This week's lower swing high of $4,382 is now important resistance since a return to that level would indicate a reversal of the bullish trend and a recovery of the 20-day moving average, which is currently at $4,374 and declining. The 200-day moving average at $4,465 and the 50-day moving average at $4,552 are two more potential resistance zones that a rally over that high will soon reach. During Monday's early Asian session, the gold price (XAU/USD) is trading with little loss at $4,155. Traders are still evaluating the developments surrounding the US-Iran peace negotiations in Switzerland. However, the US Federal Reserve's (Fed) hawkish signals may limit the precious metals' short-term growth. Over the weekend, US President Donald Trump raised concerns about the advancement of peace negotiations between Washington and Tehran by threatening to bomb Iran if Hezbollah continues to assault Israel. In response to Trump's vocal threats to strike Iran again, Iranian negotiators halted high-stakes talks with the US in Switzerland; nevertheless, those familiar with the situation indicated the conversations were still ongoing. Because Goldman Sachs no longer anticipates the US rate decrease this year, the firm projects that gold prices will increase to $4,900 per ounce by December, down from its previous estimate of $5,400. This week's price action is quietly astonishing, as gold is the asset of choice when the world appears perilous. Despite the ongoing Middle East conflict and an unwritten truce that has heightened geopolitical risk, bullion closed the week down approximately 1.5%, marking its sixth consecutive week of negative or flat closing. Instead, the metal, which is supposed to flourish in this exact setting, is moving closer to the $4,000 handle, far from the February record of $5,600. The rationale is nearly entirely related to the Federal Reserve (Fed) and has very little to do with fear. Gold has been trading as a pure inverse of US real yields for the past six weeks despite all the geopolitical worries. Despite holding at 3.75% in June, the Federal Open Market Committee (FOMC) raised its dot plot. The markets are now leaning toward a 2026 increase rather than the cuts they predicted last year, and the median prediction now carries a rising bias.