Hawkish expectations from the Federal Reserve are putting pressure on gold, which is expected to remain range-bound in the short term.
2026-06-01 09:58:47
International gold prices fell during Asian trading hours on Monday, with spot gold (XAU/USD) dropping to around $4,530, ending a two-day winning streak. Despite lingering geopolitical risks in the Middle East, rising expectations of persistently high US interest rates put pressure on gold bulls to take profits.
Iranian officials said over the weekend that diplomatic negotiations with the United States are continuing, but no substantive commitments have been made on the nuclear issue. Meanwhile, Iranian Parliament Speaker and chief negotiator, Ghalibaf, stated that Tehran will not accept any agreement reached with Washington unless it guarantees the legitimate rights and interests of the Iranian people. The lack of a breakthrough in the negotiations has dampened market expectations for a de-escalation of regional tensions.
Meanwhile, Israel expanded its ground military operations in Lebanon, putting the already fragile ceasefire to the test. Market concerns arose that a further escalation of the conflict could have potential impacts on regional stability and the global energy supply chain. Although gold, as a traditional safe-haven asset, received some buying support, the shift in market risk appetite did not fully translate into upward pressure on gold prices.
The current gold market is being influenced by both safe-haven demand and interest rate expectations. Typically, escalating geopolitical risks drive capital flows to safe-haven assets like gold. However, in the current environment, expectations regarding the Federal Reserve's monetary policy are also significantly impacting the market. Since gold itself does not generate interest income, a high-interest-rate environment increases the opportunity cost for investors to hold gold, thus diminishing its appeal.
Last Friday, several Federal Reserve officials stated that if the situation in the Middle East leads to a continued rise in energy prices and further pushes inflation higher, the Fed may need to adopt a more cautious policy stance in the future. The market believes that rising oil prices could be transmitted to overall prices through transportation, manufacturing, and consumption, thereby increasing the risk of renewed inflation in the United States.
The market generally expects the Federal Reserve to maintain a restrictive monetary policy in the short term, thus keeping US Treasury yields high. The US dollar index remains resilient, supported by strong interest rate expectations, further limiting the upside potential for gold. For international investors, high-yielding dollar assets remain highly attractive.
Globally, gold prices have recently experienced significantly increased volatility. Some funds continue to use gold as a key hedge against geopolitical risks, while others are paying closer attention to the US economic performance and future interest rate path. Market sentiment is constantly shifting between safe-haven demand and policy expectations, resulting in gold maintaining a generally high-level consolidation pattern.
One analyst pointed out: "The current gold market has entered a stage of mutual struggle between risk aversion and interest rate expectations. The future trend will find a new balance between geopolitical risks, US economic data, and changes in Federal Reserve policy."
From a daily chart perspective, gold maintains its long-term upward trend. The price is trading above major moving averages, indicating that the long-term bullish pattern remains intact. The $4,500 area forms a key support level, while the $4,580-$4,600 area represents a crucial resistance zone. A break above $4,600 could lead to further challenges of historical highs; a break below $4,500 could trigger a deeper technical correction. While the RSI indicator has retreated somewhat from its highs, it remains in strong territory, indicating that buying pressure has not completely subsided. The MACD indicator continues above the zero line, although the red bars have narrowed, suggesting a slight slowdown in upward momentum.
From the 4-hour chart, gold has entered a short-term consolidation phase. After failing to break through the $4560 level, prices have pulled back, and short-term moving averages are gradually flattening. The MACD indicator has shown a death cross signal, indicating weakening short-term momentum, while the RSI indicator has fallen back to near neutral territory. If prices regain a foothold above $4550, they may retest the $4580 resistance area; if they break below $4520, they may further test the $4500 or even $4480 support area. Overall, the market is awaiting a new fundamental catalyst.
Editor's Summary:
This week, market focus will be on the US May non-farm payrolls report. The employment data not only reflects the state of the US economy but will also directly influence market expectations for future monetary policy. If job growth is strong and wage growth remains high, the market may further postpone expectations of future easing policies, thus negatively impacting gold. Conversely, if the job market shows signs of slowing, it may strengthen market expectations for a future policy shift, providing new upward momentum for gold.
Iranian officials said over the weekend that diplomatic negotiations with the United States are continuing, but no substantive commitments have been made on the nuclear issue. Meanwhile, Iranian Parliament Speaker and chief negotiator, Ghalibaf, stated that Tehran will not accept any agreement reached with Washington unless it guarantees the legitimate rights and interests of the Iranian people. The lack of a breakthrough in the negotiations has dampened market expectations for a de-escalation of regional tensions.
Meanwhile, Israel expanded its ground military operations in Lebanon, putting the already fragile ceasefire to the test. Market concerns arose that a further escalation of the conflict could have potential impacts on regional stability and the global energy supply chain. Although gold, as a traditional safe-haven asset, received some buying support, the shift in market risk appetite did not fully translate into upward pressure on gold prices.
The current gold market is being influenced by both safe-haven demand and interest rate expectations. Typically, escalating geopolitical risks drive capital flows to safe-haven assets like gold. However, in the current environment, expectations regarding the Federal Reserve's monetary policy are also significantly impacting the market. Since gold itself does not generate interest income, a high-interest-rate environment increases the opportunity cost for investors to hold gold, thus diminishing its appeal.
Last Friday, several Federal Reserve officials stated that if the situation in the Middle East leads to a continued rise in energy prices and further pushes inflation higher, the Fed may need to adopt a more cautious policy stance in the future. The market believes that rising oil prices could be transmitted to overall prices through transportation, manufacturing, and consumption, thereby increasing the risk of renewed inflation in the United States.
The market generally expects the Federal Reserve to maintain a restrictive monetary policy in the short term, thus keeping US Treasury yields high. The US dollar index remains resilient, supported by strong interest rate expectations, further limiting the upside potential for gold. For international investors, high-yielding dollar assets remain highly attractive.
Globally, gold prices have recently experienced significantly increased volatility. Some funds continue to use gold as a key hedge against geopolitical risks, while others are paying closer attention to the US economic performance and future interest rate path. Market sentiment is constantly shifting between safe-haven demand and policy expectations, resulting in gold maintaining a generally high-level consolidation pattern.
One analyst pointed out: "The current gold market has entered a stage of mutual struggle between risk aversion and interest rate expectations. The future trend will find a new balance between geopolitical risks, US economic data, and changes in Federal Reserve policy."
From a daily chart perspective, gold maintains its long-term upward trend. The price is trading above major moving averages, indicating that the long-term bullish pattern remains intact. The $4,500 area forms a key support level, while the $4,580-$4,600 area represents a crucial resistance zone. A break above $4,600 could lead to further challenges of historical highs; a break below $4,500 could trigger a deeper technical correction. While the RSI indicator has retreated somewhat from its highs, it remains in strong territory, indicating that buying pressure has not completely subsided. The MACD indicator continues above the zero line, although the red bars have narrowed, suggesting a slight slowdown in upward momentum.
From the 4-hour chart, gold has entered a short-term consolidation phase. After failing to break through the $4560 level, prices have pulled back, and short-term moving averages are gradually flattening. The MACD indicator has shown a death cross signal, indicating weakening short-term momentum, while the RSI indicator has fallen back to near neutral territory. If prices regain a foothold above $4550, they may retest the $4580 resistance area; if they break below $4520, they may further test the $4500 or even $4480 support area. Overall, the market is awaiting a new fundamental catalyst.
Editor's Summary:
This week, market focus will be on the US May non-farm payrolls report. The employment data not only reflects the state of the US economy but will also directly influence market expectations for future monetary policy. If job growth is strong and wage growth remains high, the market may further postpone expectations of future easing policies, thus negatively impacting gold. Conversely, if the job market shows signs of slowing, it may strengthen market expectations for a future policy shift, providing new upward momentum for gold.
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- The market involves risk, and trading may not be suitable for all investors. This article is for reference only and does not constitute personal investment advice, nor does it take into account certain users’ specific investment objectives, financial situation, or other needs. Any investment decisions made based on this information are at your own risk.
