Gold Price Slips Below $3,355 as Dollar Surges; Israel-Iran Conflict Escalates

Gold drops as dollar surges and rate cut hopes fade. While conflict between Israel and Iran usually boosts demand for safe-haven assets...

Written by: Arslan Butt • Friday, June 20, 2025 • 2 min read

• Last updated: Friday, June 20, 2025

Quick overview

Gold prices have dropped as the dollar strengthens and hopes for rate cuts diminish.
Escalating tensions between Israel and Iran have led traders to avoid taking bold positions in gold.
The Federal Reserve has maintained steady rates, with only two cuts anticipated this year, impacting gold demand.
Technical indicators show gold breaking below key support levels, suggesting continued downside risk.

Gold drops as dollar surges and rate cut hopes fade. While conflict between Israel and Iran usually boosts demand for safe-haven assets, traders are not taking bold positions.

Tensions escalated after Israel bombed Iranian nuclear facilities and Iran hit back with missiles and drones, targeting an Israeli hospital. With no signs of de-escalation and the White House saying former President Trump will decide in two weeks if the US will intervene, uncertainty remains high.

“Right now there’s a fluid situation in the Middle East that causes traders not to take any aggressive position,” said Kelvin Wong, senior analyst at OANDA. As risk appetite disappears, gold’s safe-haven appeal is being overshadowed by other macro factors.

Fed Holds Steady as Rate Cut Bets Shrink

The Federal Reserve held rates steady on Wednesday and signaled only two rate cuts this year. Markets were hoping for more aggressive easing after Trump publicly urged the Fed to cut rates by 2.5%.

Analysts at ANZ said “steady yields and renewed USD strength” have pressured gold. The dollar is set for its biggest weekly gain in over a month, making gold more expensive for international buyers.

Key takeaways:

Fed keeps rates unchanged
Trump wants 2.5% rate cut
USD strength kills gold demand

Technical Breakdown: Gold Breaks Below Key Support

Gold is now at $3,351, below the ascending trendline that supported the uptrend since early June. This is a big technical shift. Price action shows a series of lower highs, with gold stuck below the 50-period EMA at $3,377.

GOLD Price Chart - Source: Tradingview — GOLD Price Chart – Source: Tradingview

Momentum indicators are red. MACD is bearish, with both lines down and histogram bars negative. No reversal patterns like hammer or bullish engulfing, means downside risk continues.

Support is at $3,343, then $3,319 and $3,293. A break below $3,343 with confirmation, especially a strong red candle, is a short opportunity with stop-loss at $3,371 and target at $3,319.

Conclusion:

Gold is squeezed by both macro and technical. A stronger dollar, dovish Fed and Middle East uncertainty will keep it sideways for now. If $3,343 breaks, bears will push before bulls kick in.

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ABOUT THE AUTHOR See More

Arslan Butt

Lead Markets Analyst – Multi-Asset (FX, Commodities, Crypto)

Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics. His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker. His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.