A weaker dollar and Middle East risks propelled gold prices above $4,100, and further gains are likely in the short term.
2026-07-09 15:39:15
International gold prices rebounded after a significant sell-off on Wednesday, with spot gold returning above $4,100 per ounce . This rebound was primarily driven by a weaker dollar and safe-haven demand stemming from renewed tensions in the Middle East. However, a reassessment of the Federal Reserve's future monetary policy path continues to limit further upside potential for gold.
The recent decline in the US dollar index has lowered the cost of holding gold priced in US dollars, providing short-term support for precious metal prices. Meanwhile, tensions between the US and Iran have escalated again, with both sides launching a new round of mutual strikes on Wednesday, rapidly fueling risk aversion in the market. Increased geopolitical risks typically enhance gold's safe-haven appeal, especially given the uncertainty surrounding global energy supplies, leading investors to increase their gold holdings to hedge against market volatility.
However, rising energy prices have also brought new inflationary pressures. As crude oil prices rebound due to escalating tensions in the Middle East, markets are concerned that energy costs could reignite global inflation, putting greater policy pressure on major central banks, especially the Federal Reserve. If the pace of inflation decline slows, the Fed may need to maintain restrained interest rates for a longer period, or even reconsider the possibility of further rate hikes. This puts significant pressure on gold, as it does not generate interest income and its investment appeal typically diminishes in a high-interest-rate environment.
The minutes of the Federal Reserve's June policy meeting further reinforced market concerns about the risks of a hawkish policy stance. The minutes showed that some officials believed inflation risks remained high and that a tight monetary policy would need to be maintained to ensure a sustained decline in price pressures. Thomas Ryan, an economist at Capital Economics, stated that the minutes reaffirmed the possibility of a Fed rate hike in September . This view led some market participants to readjust their interest rate expectations, putting some downward pressure on gold prices.
The market is currently awaiting further economic data, particularly US inflation and employment figures. If future data shows inflation rebounding, the market may further increase the probability of a Federal Reserve rate hike, thereby strengthening the dollar and limiting gold's rise; conversely, weak economic data could reduce tightening expectations, providing further upside potential for gold.
From a technical perspective, spot gold has seen a short-term rebound, but remains in a high-level consolidation pattern overall. On the daily chart, gold prices have climbed back above $4100 , easing short-term moving average resistance. The MACD shows signs of recovery at low levels, but the momentum bars have not yet strengthened significantly , indicating that the bulls are recovering, but a trend reversal signal is still unclear.
On the upside resistance front, gold is initially focused on the $4,140/oz area. A successful break above this level could lead to a further challenge of the $4,180/oz resistance level. Conversely, a failed breakout could result in a retest of the $4,100 support level.
From a four-hour chart perspective, gold prices have seen a stronger short-term rebound, with prices now trading above short-term moving averages. The MACD has formed a golden cross at a low level, and the RSI indicator has risen back to neutral territory , indicating a recovery in short-term buying pressure. However, given the persistent hawkish expectations from the Federal Reserve, further fundamental confirmation is needed for gold prices to rise. A break below $4050/oz could lead to a retest of the psychological level of $4000/oz ; conversely, a hold above $4140/oz could open up further upside potential.
Editor's Summary : Gold is currently under the dual influence of safe-haven demand and high interest rate pressure. Escalating tensions in the Middle East and a weakening dollar have driven a rapid rebound in gold prices, but rising energy prices may amplify inflation risks, increasing the likelihood that the Federal Reserve will maintain a hawkish policy. In the short term, gold's trajectory will depend on whether geopolitical risks escalate and the market's repricing of the Fed's September policy. If safe-haven demand continues to rise, gold still has upward momentum; however, if expectations of interest rate hikes strengthen further, gold prices may face pressure for a period of adjustment.
The recent decline in the US dollar index has lowered the cost of holding gold priced in US dollars, providing short-term support for precious metal prices. Meanwhile, tensions between the US and Iran have escalated again, with both sides launching a new round of mutual strikes on Wednesday, rapidly fueling risk aversion in the market. Increased geopolitical risks typically enhance gold's safe-haven appeal, especially given the uncertainty surrounding global energy supplies, leading investors to increase their gold holdings to hedge against market volatility.
However, rising energy prices have also brought new inflationary pressures. As crude oil prices rebound due to escalating tensions in the Middle East, markets are concerned that energy costs could reignite global inflation, putting greater policy pressure on major central banks, especially the Federal Reserve. If the pace of inflation decline slows, the Fed may need to maintain restrained interest rates for a longer period, or even reconsider the possibility of further rate hikes. This puts significant pressure on gold, as it does not generate interest income and its investment appeal typically diminishes in a high-interest-rate environment.
The minutes of the Federal Reserve's June policy meeting further reinforced market concerns about the risks of a hawkish policy stance. The minutes showed that some officials believed inflation risks remained high and that a tight monetary policy would need to be maintained to ensure a sustained decline in price pressures. Thomas Ryan, an economist at Capital Economics, stated that the minutes reaffirmed the possibility of a Fed rate hike in September . This view led some market participants to readjust their interest rate expectations, putting some downward pressure on gold prices.
The market is currently awaiting further economic data, particularly US inflation and employment figures. If future data shows inflation rebounding, the market may further increase the probability of a Federal Reserve rate hike, thereby strengthening the dollar and limiting gold's rise; conversely, weak economic data could reduce tightening expectations, providing further upside potential for gold.
From a technical perspective, spot gold has seen a short-term rebound, but remains in a high-level consolidation pattern overall. On the daily chart, gold prices have climbed back above $4100 , easing short-term moving average resistance. The MACD shows signs of recovery at low levels, but the momentum bars have not yet strengthened significantly , indicating that the bulls are recovering, but a trend reversal signal is still unclear.
On the upside resistance front, gold is initially focused on the $4,140/oz area. A successful break above this level could lead to a further challenge of the $4,180/oz resistance level. Conversely, a failed breakout could result in a retest of the $4,100 support level.
From a four-hour chart perspective, gold prices have seen a stronger short-term rebound, with prices now trading above short-term moving averages. The MACD has formed a golden cross at a low level, and the RSI indicator has risen back to neutral territory , indicating a recovery in short-term buying pressure. However, given the persistent hawkish expectations from the Federal Reserve, further fundamental confirmation is needed for gold prices to rise. A break below $4050/oz could lead to a retest of the psychological level of $4000/oz ; conversely, a hold above $4140/oz could open up further upside potential.
Editor's Summary : Gold is currently under the dual influence of safe-haven demand and high interest rate pressure. Escalating tensions in the Middle East and a weakening dollar have driven a rapid rebound in gold prices, but rising energy prices may amplify inflation risks, increasing the likelihood that the Federal Reserve will maintain a hawkish policy. In the short term, gold's trajectory will depend on whether geopolitical risks escalate and the market's repricing of the Fed's September policy. If safe-haven demand continues to rise, gold still has upward momentum; however, if expectations of interest rate hikes strengthen further, gold prices may face pressure for a period of adjustment.
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