#MyGateTradeStory

Gold extends its weekly decline amid the Federal Reserve's hawkish policy impact and easing geopolitical risks on sentiment
Gold prices continue to fall this week, trading around $4,139 after reaching a low of $4,121. While a slight decline in the US dollar has slowed the pace of decline, gold is still on track to achieve its third consecutive weekly loss. This downward trend is mainly driven by changing expectations regarding Federal Reserve policy and decreasing global political tensions.
Market sentiment has recently shifted. The peace agreement between the US and Iran has reduced the need for gold as a safe haven. At the same time, the Federal Reserve indicated that interest rates may remain elevated for a longer period. Many traders are now betting on another rate hike later this year as inflation remains a concern.
Inflation conditions are complicated by rising oil prices, with US consumer inflation reaching 4.2% in May. Federal Reserve Chair Jerome Powell explained that the central bank aims to reduce inflation to its 2% target. Since higher interest rates make non-yielding assets like gold less attractive compared to fixed-income investments, investors are seeking alternatives.
Physical gold demand also faces challenges. Recently, India increased import duties on gold, leading to a significant drop in imports in one of the world's largest jewelry markets. However, central banks continue to buy gold, providing long-term support for the price.
Geopolitical risks have also eased. The 60-day memorandum of understanding between the US and Iran boosted market confidence, and reports of a ceasefire between Israel and Hezbollah reduced demand for gold as a hedge against instability.
Looking at daily charts, sellers remain dominant. Gold is stuck in a pattern of lower highs and lower lows. After failing to break through the resistance level at $5,500 earlier this year, the price has remained weak.
Currently, gold is testing a key support level at $4,155. While buyers have managed to hold this line so far, the recovery appears weak. If the price closes below $4,155 on a daily basis, it could fall further toward the next support level at $3,881. If selling accelerates, the price could drop toward the range of $3,500 to $3,250.
For a trend reversal to turn positive, gold needs to break through resistance between $4,399 and $4,450. Surpassing this zone could push the price toward $4,759 or $4,867. The biggest obstacle remains the supply zone between $5,470 and $5,616.
Overall, technical indicators show that downward pressure remains stronger than buying interest. Although small rallies may occur, the overall trend remains bearish as long as gold stays below these key resistance levels.
Key Levels
Support: $4,155, $3,881, $3,500, $3,251
Resistance: $4,399, $4,450, $4,759, $4,867, $5,470, $5,616
Outlook
Gold is in a volatile position, standing near a critical support. If it remains above $4,155, a short-term rebound may occur. However, a break below that level is likely to lead to further losses toward $3,881. Until the price moves above $4,450, the daily trend indicates a bearish outlook.
$XAUT