Gold Price Holds Near Two-Week Low Despite Weaker USD and Fed Dovishness

Gold Price Struggles Despite Weaker USD as Israel-Iran Ceasefire Boosts Risk Appetite

Gold (XAU/USD) is trading just above a two-week low in early European hours on Tuesday, as geopolitical tensions ease following the Israel-Iran ceasefire. Despite a significantly weaker US Dollar (USD) driven by dovish Federal Reserve rhetoric and rate cut bets, gold remains under pressure as investors pivot toward riskier assets.

Key Drivers of Gold Price Today:

• Ceasefire between Israel and Iran triggers global risk-on sentiment, reducing demand for safe-haven assets like gold.
• US Dollar Index (DXY) drops sharply to a one-week low, reflecting July Fed rate cut expectations following mixed US PMI data and dovish Fed comments.
• Despite the weaker USD, XAU/USD fails to attract strong buying, showing that traders are cautious ahead of Fed Chair Jerome Powell’s congressional testimony.

Technical Outlook:

• Current support sits at the psychological $2,300 level.
• Resistance remains at the 9-day EMA near $2,345.
• A break below current support could open the path to $2,280, while upside remains capped unless Powell signals further policy dovishness.

What to Watch Next:

All eyes are now on Fed Chair Powell’s testimony later today, which could confirm or contradict market expectations for a rate cut in July. Any hawkish surprise could further dampen gold’s appeal.

Related Articles on Tredu:

• US Dollar Index Sinks on Ceasefire News, Fed Bets
• Oil Falls as Israel-Iran Ceasefire Takes Effect
• Silver Price Tests Support Near $36.00