Gold (XAU/USD) experienced renewed selling pressure during the Asian session on Wednesday, falling below the $4,000 psychological mark and remaining close to its lowest level since November 2025, which was touched on Tuesday [1]. This marks the third consecutive day of declines for the precious metal, driven by a stronger US Dollar (USD) that has been supported by ongoing uncertainty over US-Iran negotiations and expectations of further Federal Reserve (Fed) interest rate hikes [1].
US negotiators Jared Kushner and Steve Witkoff arrived in Qatar on Tuesday to discuss the implementation of an initial deal aimed at ending the war in Iran. However, Tehran has denied any planned meeting with US envoys, casting doubt on the prospects for a lasting peace agreement and maintaining the geopolitical risk premium in the market [1]. Additionally, renewed tensions over the Strait of Hormuz have revived inflation fears, which, combined with a resilient US labor market, have reinforced hawkish Fed expectations and boosted the safe-haven appeal of the USD [1].
Key US economic data released on Tuesday included the Job Openings and Labor Turnover Survey (JOLTS), which showed job openings rising to 7.594 million in May—a two-year high. The Conference Board’s US Consumer Confidence Index also increased to 91.2 in June from 90.6 in May [1]. Cleveland Fed President Beth Hammack stated that she may support higher interest rates if inflation pressures do not moderate. According to the CME Group's FedWatch Tool, traders are assigning over an 80% probability of a Fed rate hike by the end of this year [1].
Market participants are awaiting further cues from Fed Chair Kevin Warsh's upcoming appearance at the European Central Bank (ECB) Forum in Sintra, as well as Wednesday's US economic releases, including the ADP private-sector employment report and the ISM Manufacturing PMI. The focus will then shift to Thursday's US Nonfarm Payrolls (NFP) report. The prevailing fundamental backdrop suggests that gold's path of least resistance remains to the downside, with any attempted recovery likely to be capped [1].
From a technical perspective, gold remains below the 100-period Simple Moving Average (SMA) on the 4-hour chart, maintaining a bearish near-term tone [1].
CONCLUSION
Gold continues to face downward pressure as a strong US Dollar, hawkish Fed expectations, and geopolitical uncertainties weigh on sentiment. With key US economic data and Fed commentary on the horizon, the market outlook for gold remains bearish in the near term. Any recovery attempts are expected to encounter selling interest and remain limited.