Gold edged lower during Thursday’s Asian session, giving back part of the previous day’s sharp gain of more than 3% and pulling back from its highest level since early June. The pullback comes as hawkish signals from the Federal Reserve and renewed geopolitical tensions around the Middle East lent fresh support to the US dollar, putting pressure on the non‑yielding precious metal.
Hawkish FOMC minutes strengthen dollar
Minutes from the Federal Reserve’s July 28‑29 meeting, released on Wednesday, showed that officials believed they would need to raise interest rates soon unless inflation made more progress toward the 2% target. Recent US data indicated modest monthly price increases in July, but inflation remains well above the central bank’s goal. Meanwhile, worries that higher energy prices linked to the Middle East crisis could rekindle inflationary pressure kept at least one more rate hike in 2026 on the table. These expectations underpinned the US dollar, which in turn weighed on gold.
US‑Iran standoff adds to safe‑haven demand for the greenback
Geopolitical uncertainty also supported the dollar. President Donald Trump said the US would launch the “most crushing economic operation” against Iran and threatened severe financial penalties on any country that helps Tehran evade sanctions or does business with it. The warning came as the US and Iran remained deadlocked over the Strait of Hormuz, keeping war‑risk premiums elevated. Safe‑haven flows into the dollar added to the headwinds for gold.
Treasury buyback programme pulls bond yields lower, offering some support to gold
Despite the dollar’s strength, the slide in long‑term US bond yields may limit the downside for gold. The Treasury Department announced on Wednesday that it would at least double its buyback operations for longer‑dated government debt starting in September. The 30‑year yield tumbled from its highest level since June 2007. According to TD Securities, the expanded liquidity support buyback programme “gave metals a jolt of life,” helping to revive interest in precious metals. Lower yields reduce the opportunity cost of holding gold, which offers no yield.
Technical levels to watch
On the charts, the XAU/USD pair met resistance near the $4,510–$4,515 zone, which combines the 200‑day simple moving average and the 61.8% Fibonacci retracement of the April‑June decline. That suggests upside momentum may be fading in the short term. The relative strength index stands at 65.17, close to overbought territory, while the MACD indicator remains positive. Initial support lies at the 50% Fibonacci retracement of $4,404, followed by the 38.2% level near $4,295 and the 23.6% Fibo at $4,159 if the correction extends. On the upside, a clear break above the $4,510‑$4,515 confluence could open the door toward the 78.6% Fibo at $4,670 and eventually the cycle high near $4,869. Traders will also watch Thursday’s US data releases, including the Philly Fed Manufacturing Index and weekly jobless claims, along with speeches from FOMC members and any fresh geopolitical headlines.
Key takeaways
- Gold slipped from an early‑June high after hawkish FOMC minutes reinforced rate‑hike expectations and the dollar strengthened.
- US‑Iran tensions and threats of economic action against Tehran boosted safe‑haven demand for the greenback.
- A Treasury decision to expand long‑dated bond buybacks pushed 30‑year yields sharply lower, potentially supporting gold.
- Key technical resistance is at $4,510‑$4,515; support starts at $4,404, then $4,295.
Common questions
Why did gold retreat after strong gains?
The pullback was driven by a stronger US dollar, which gained after hawkish Federal Reserve minutes and heightened geopolitical tensions around the US‑Iran standoff. A stronger dollar makes gold more expensive for buyers using other currencies.
Could lower bond yields limit gold’s decline?
Yes, falling long‑term Treasury yields reduce the opportunity cost of holding gold, and the Treasury’s expanded buyback programme has been cited by analysts as a supportive factor for metals. This may keep the downside limited in the near term.
What are the key technical levels for gold right now?
Immediate resistance is in the $4,510‑$4,515 area. Support is at $4,404 (50% Fibonacci), followed by $4,295 and $4,159. A break above resistance could lead to $4,670 and the cycle high near $4,869.
The interplay between the dollar, bond yields and geopolitical developments will determine whether gold can hold recent gains or extend its correction. Stay updated with the live gold price to track movements in real time.