Gold prices continued their decline during the Asian trading session, with spot gold trading near $4,830, marking a sixth consecutive day of losses. This represents the longest losing streak since late 2024. The primary drivers of gold's current trend are shifting from geopolitical safe-haven demand towards changes in macroeconomic policy and interest rate expectations.
From a policy perspective, the Federal Reserve held interest rates steady within the 3.5%-3.75% range in its latest meeting, marking the second consecutive pause. While maintaining a seemingly neutral stance, Chair Jerome Powell explicitly stated that rising energy prices could push overall inflation higher in the short term. This communication has significantly altered market expectations for the future path of monetary policy, re-establishing the "higher for longer" interest rate narrative as the dominant theme.
Although the dot plot still indicates the possibility of one rate cut within the year, market expectations for the pace of future easing have clearly cooled. Analysts widely believe the Fed is currently more focused on inflation risks than on slowing economic growth, suggesting policy will remain restrictive. Rising real interest rates have become a key factor pressuring gold, as the metal itself generates no yield, making it less attractive in a high-rate environment.
Concurrently, rising energy prices are reinforcing inflationary persistence. The escalating situation in the Middle East, with frequent attacks on key energy infrastructure, is intensifying market concerns about disruptions to crude oil and natural gas supplies. Higher energy prices not only boost inflation expectations but also indirectly support a stronger US dollar, creating a dual headwind for dollar-denominated gold.
However, from a safe-haven perspective, gold still retains some support. The ongoing escalation of conflict in the Middle East has significantly increased geopolitical risks, which should theoretically drive capital into safe-haven assets. Current market structure, however, shows that safe-haven flows are favoring US dollar assets over gold, preventing the metal from fully benefiting from the rise in risk aversion.
In terms of market performance, gold has retreated more than 10% from its recent highs, entering a technical correction phase. The consecutive declines reflect a market repricing of the macro environment, shifting from a "dominated by easing expectations" narrative to a "higher rates for longer" reality.
From a technical standpoint, daily chart analysis shows gold has broken below key moving average support, shifting the trend from upward to weak and consolidating. Crucial support levels are concentrated near $4,800; a decisive break below this level could open the door for a further test of the $4,700 area. Resistance above is situated in the $4,900 to $4,950 range, with limited room for a short-term rebound. Momentum indicators suggest bearish forces continue to strengthen. On the 4-hour chart, the price is within a clear downtrend channel, with the strength of rebounds gradually weakening. Short-term moving averages are arranged in a bearish pattern, indicating selling pressure remains dominant. If the price fails to stabilize near $4,830, the downtrend may continue. Conversely, any technical rebound would need to overcome resistance near $4,900.
Overall, gold is currently caught between macroeconomic pressures and safe-haven demand, but the dominant short-term factors remain interest rate expectations and the trajectory of the US dollar.
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