First Monthly Gain in Five Months as the War Keeps Escalating

Bias: Choppy, digesting a second push to new highs for the move. Key driver: soft PCE and a weaker dollar versus escalating strikes and rising September hike odds.

The Setup
Gold actually pushed to a new high for this move since my last post, running from the FOMC spike up to a fresh peak near 4,122 to 4,125, before pulling back to the current 4,055 area. The two day rally into that peak came on a weaker dollar, helped along by suspected Japanese intervention to prop up the yen, plus the Fed holding rates and reaffirming its inflation fighting stance. Then Iran launched ballistic missiles at US troops in Jordan, and the US struck back at dozens of IRGC targets in Iran, which kept the safe haven bid alive even as the dollar firmed back up and traders booked profits into Friday. Gold's actually on pace for its first monthly gain in five months here, which is easy to miss with all the day to day whipsaw.

🔍 Technical Read

• Structure: after the initial FOMC spike to around 4,117, gold pulled back, then pushed to a marginally higher peak near 4,122 to 4,125, before rolling over again to the current 4,055 area.
• Current position: mid range between the recent peak and the 4,018 to 4,025 support that's held multiple times over the past two weeks.
• What's different this time: two failed attempts to hold new highs in a row suggests sellers are active up there, even with the fundamental backdrop still tilted supportive.
• Support that matters: 4,018 to 4,025 first, the same shelf as always, then 3,975 to 4,000 if that finally gives way.
• Resistance if this bounces again: 4,090 to 4,100 first, then the 4,122 to 4,125 zone as the actual cap for the move.

📰 Fundamental Backdrop

• Inflation data actually came in soft. Core PCE, the Fed's preferred gauge, eased to 3.7 percent annually, which should argue against more hikes, not for them.
• The market isn't fully buying the soft data though. September hike odds are sitting around 63 percent, even higher than the odds going into this week's meeting, which tells you the dissents from the Fed vote are still coloring how traders read every release.
• The war keeps finding new ways to escalate. Iran hit US troops in Jordan with ballistic missiles, and the US retaliated against dozens of IRGC targets, all within the last few days.
• A weaker dollar, partly tied to suspected Bank of Japan intervention to defend the yen, has done as much work supporting gold this week as anything Fed or war related.
• Central banks haven't stopped buying through any of this. The PBoC added another 14.93 tonnes in June, its 20th straight month of purchases, the kind of structural detail that doesn't show up on a 15 minute chart but matters over months.

🎯 Levels That Matter

• Move high: 4,122 to 4,125
• First resistance on a bounce: 4,090 to 4,100
• Current zone: 4,050 to 4,060
• Key support: 4,018 to 4,025
• Deeper support: 3,975 to 4,000

🔀 Scenario Watch

1. Dollar weakness resumes, bullish: if the yen intervention story continues or the dollar simply resumes falling, gold likely retests 4,090 to 4,100 and then the 4,122 to 4,125 highs, especially with soft PCE giving cover.
2. Rangebound digestion, neutral: gold chops between 4,018 and 4,100 while the market waits on the next PMI, jobs, or war headline to pick a direction, honestly the base case after two rejected pushes at new highs.
3. September hike odds keep climbing, bearish: if upcoming data reinforces the 63 percent hike odds instead of the soft PCE print, gold likely grinds back toward 4,018 and then 3,975 to 4,000 regardless of what the war is doing.

💭 My Take
Two rejected attempts at new highs in the same week is worth paying attention to, even with the fundamental story still broadly supportive. I'd treat this as a market that wants to go higher on the headlines but keeps running into real sellers up near 4,100 to 4,125. The first monthly green candle in five months is the bigger picture worth remembering here, the daily whipsaw is just noise sitting on top of that.

Not financial advice, just posted for discussion and education. Rejected highs twice in a row deserve respect even in a bullish backdrop, so don't ignore the sellers showing up.