The US-Iran peace framework eased inflation concerns, and cooling expectations for a Fed rate hike spurred a slight rebound in gold prices.
2026-06-16 10:05:35
Spot gold (XAU/USD) maintained a modest upward trend in early Asian trading on Tuesday, continuing the rebound from the previous session. With the US and Iran reaching a comprehensive framework agreement to end the long-standing military conflict, market concerns about energy supply disruptions and persistently high global inflation have eased significantly, allowing safe-haven funds to gradually readjust their positions. Gold, as a traditional safe-haven asset, has regained some buying support due to falling oil prices, a weaker dollar, and declining US Treasury yields.
US President Donald Trump and Vice President Vance have signed an electronic memorandum of understanding with Iran. Trump stated that the Strait of Hormuz has partially reopened and is expected to be fully open to navigation this Friday. However, some uncertainty remains regarding the details of the agreement. Iran plans to impose tolls on passage through this crucial waterway, while the US has indicated that normal shipping will resume without additional charges. Meanwhile, Trump warned that the US might resume military action if Iran fails to reach a final nuclear agreement with the US, keeping markets cautious about long-term stability in the Middle East.
Market analysts believe the gold market is gradually digesting the safe-haven premium previously incurred due to the conflict. With news of a peace agreement easing the risk of rising energy prices, the market's biggest concern—inflationary pressures—has lessened, leading to a simultaneous decline in US Treasury yields, the US dollar index, and international oil prices. The short-term drivers of the gold market have shifted from geopolitical risks to expectations regarding the Federal Reserve's monetary policy and the performance of US economic data.
Meanwhile, cooling expectations for a Federal Reserve rate hike have also provided support for gold, a non-interest-bearing asset. According to the CME Group's FedWatch tool, traders' expectations of a December rate hike by the Fed have fallen from nearly 70% last week to about 58%. The market widely expects the Fed to maintain the federal funds rate at 3.50% to 3.75% in its upcoming interest rate decision, in order to further observe the continued impact of the previous energy price shock on the economy and inflation.
While gold has seen a short-term rebound, the bulls still face significant technical pressure from an overall market structure perspective. The gains previously driven by safe-haven demand are gradually being digested by the market. Investors are focusing on the Federal Reserve's policy statement and the Chairman's speech for further clues about the future path of interest rates and the dollar's trajectory. These factors will determine whether gold can break free from its current weak consolidation pattern.
From a daily chart perspective, spot gold remains in a weak consolidation phase, with prices consistently trading below the Bollinger Band's middle line and the 100-day moving average, indicating that a medium- to long-term rebound trend has not yet been re-established. The Relative Strength Index (RSI) is currently around 43, below the midline, suggesting that downward momentum has not completely subsided. The first resistance level to watch is around $4360. A decisive break above this level could see prices further challenge the Bollinger Band's middle line area around $4400, followed by stronger resistance in the dense resistance zone between $4680 and $4760. On the downside, the key support level to watch is around $4150. A breach of this area could reopen the possibility of a pullback to previous lows.
From a 4-hour chart perspective, gold has recently undergone a technical correction after a rapid decline, but the rebound has been limited, and the price has not yet broken through key moving average resistance. The short-term trend remains weak and volatile. Technical indicators suggest that bearish momentum has eased somewhat, but the bulls have not yet formed a clear trend reversal signal. If gold can stabilize above $4360, the short-term rebound potential is expected to expand; however, if it encounters resistance again and falls below the $4145 support level, a new round of correction should be anticipated.
Editor's Summary : The US-Iran peace framework agreement reduced market concerns about energy supply disruptions and persistently rising inflation, pushing oil prices and the dollar lower and providing a temporary rebound opportunity for gold. However, as disagreements on key terms remain unresolved, the risk of recurring tensions in the Middle East persists. Furthermore, the future policy path of the Federal Reserve remains the core variable determining the medium- to long-term trend of gold. In the short term, gold may maintain a volatile and corrective trend, but the overall weak pattern has not completely changed until it breaks through key technical resistance levels. Investors should pay close attention to the market impact of the Federal Reserve's interest rate decision, policy guidance, and subsequent US economic data.
US President Donald Trump and Vice President Vance have signed an electronic memorandum of understanding with Iran. Trump stated that the Strait of Hormuz has partially reopened and is expected to be fully open to navigation this Friday. However, some uncertainty remains regarding the details of the agreement. Iran plans to impose tolls on passage through this crucial waterway, while the US has indicated that normal shipping will resume without additional charges. Meanwhile, Trump warned that the US might resume military action if Iran fails to reach a final nuclear agreement with the US, keeping markets cautious about long-term stability in the Middle East.
Market analysts believe the gold market is gradually digesting the safe-haven premium previously incurred due to the conflict. With news of a peace agreement easing the risk of rising energy prices, the market's biggest concern—inflationary pressures—has lessened, leading to a simultaneous decline in US Treasury yields, the US dollar index, and international oil prices. The short-term drivers of the gold market have shifted from geopolitical risks to expectations regarding the Federal Reserve's monetary policy and the performance of US economic data.
Meanwhile, cooling expectations for a Federal Reserve rate hike have also provided support for gold, a non-interest-bearing asset. According to the CME Group's FedWatch tool, traders' expectations of a December rate hike by the Fed have fallen from nearly 70% last week to about 58%. The market widely expects the Fed to maintain the federal funds rate at 3.50% to 3.75% in its upcoming interest rate decision, in order to further observe the continued impact of the previous energy price shock on the economy and inflation.
While gold has seen a short-term rebound, the bulls still face significant technical pressure from an overall market structure perspective. The gains previously driven by safe-haven demand are gradually being digested by the market. Investors are focusing on the Federal Reserve's policy statement and the Chairman's speech for further clues about the future path of interest rates and the dollar's trajectory. These factors will determine whether gold can break free from its current weak consolidation pattern.
From a daily chart perspective, spot gold remains in a weak consolidation phase, with prices consistently trading below the Bollinger Band's middle line and the 100-day moving average, indicating that a medium- to long-term rebound trend has not yet been re-established. The Relative Strength Index (RSI) is currently around 43, below the midline, suggesting that downward momentum has not completely subsided. The first resistance level to watch is around $4360. A decisive break above this level could see prices further challenge the Bollinger Band's middle line area around $4400, followed by stronger resistance in the dense resistance zone between $4680 and $4760. On the downside, the key support level to watch is around $4150. A breach of this area could reopen the possibility of a pullback to previous lows.
From a 4-hour chart perspective, gold has recently undergone a technical correction after a rapid decline, but the rebound has been limited, and the price has not yet broken through key moving average resistance. The short-term trend remains weak and volatile. Technical indicators suggest that bearish momentum has eased somewhat, but the bulls have not yet formed a clear trend reversal signal. If gold can stabilize above $4360, the short-term rebound potential is expected to expand; however, if it encounters resistance again and falls below the $4145 support level, a new round of correction should be anticipated.
Editor's Summary : The US-Iran peace framework agreement reduced market concerns about energy supply disruptions and persistently rising inflation, pushing oil prices and the dollar lower and providing a temporary rebound opportunity for gold. However, as disagreements on key terms remain unresolved, the risk of recurring tensions in the Middle East persists. Furthermore, the future policy path of the Federal Reserve remains the core variable determining the medium- to long-term trend of gold. In the short term, gold may maintain a volatile and corrective trend, but the overall weak pattern has not completely changed until it breaks through key technical resistance levels. Investors should pay close attention to the market impact of the Federal Reserve's interest rate decision, policy guidance, and subsequent US economic data.
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