Geopolitical pressure rises. Can FOMC rescue gold?

Despite escalating geopolitical tensions between the U.S. and Iran, gold remains under renewed selling pressure instead of extending last week's recovery. Unlike previous periods when geopolitical risks directly fueled safe-haven demand, the market is now focusing on their broader macroeconomic consequences. Rising oil prices increase inflation expectations, giving the Federal Reserve more reason to keep interest rates higher for longer. As a result, U.S. Treasury yields and the U.S. Dollar continue to attract capital flows, limiting gold's ability to sustain a meaningful recovery.

However, from a broader macro perspective, the underlying narrative remains unchanged. The U.S. economy continues to show resilience, inflation pressures have not fully disappeared, and the Federal Reserve has yet to signal a meaningful shift toward a dovish stance. While last week's weaker Dollar supported a sharp rebound in gold, the move still appears corrective rather than the beginning of a sustainable bullish trend.

Technically, price is now approaching the Supply + Rising Trendline + Fibonacci confluence, which represents the final defensive zone for buyers. This area will determine whether the recent recovery can evolve into a larger reversal or simply become another liquidity-driven rally within the broader bearish structure.

On the other hand, if sellers successfully break below this support cluster, the current bearish trend is likely to accelerate toward lower liquidity zones. Conversely, only a decisive breakout above the 42xx resistance region would invalidate the current bearish bias and confirm that a larger structural recovery is underway.

PRIMARY SCENARIO

Gold is testing the Supply + Rising Trendline + Fibonacci confluence, the final support zone before the broader bearish trend resumes.

If buyers defend this area, a short-term technical rebound toward higher resistance remains possible. However, a confirmed breakdown would reinforce the dominant bearish structure and expose lower liquidity levels.

The upcoming FOMC Minutes will likely become the next major catalyst for volatility.

MARKET VIEW

The market's focus has shifted from geopolitical headlines to their impact on inflation, Federal Reserve expectations, and the U.S. Dollar. As long as higher oil prices continue supporting inflation concerns and the Fed maintains a cautious stance, the broader macro environment still favors the Dollar over gold.

Current Bias: Bearish unless gold decisively breaks above the 42xx resistance.

Key Focus: Supply + Rising Trendline + Fibonacci support, followed by the FOMC Minutes.

LucasGrayTrading