Gold Slips to $3,298 as Ceasefire & Dollar Strength Trigger $3,283 Setup
Gold slid to $3,298 on Friday, heading for its second straight weekly decline as geopolitical easing and a modest uptick in the U.S. dollar.
Quick overview
- Gold prices fell to $3,298, marking a second consecutive weekly decline due to easing geopolitical tensions and a stronger U.S. dollar.
- The recent ceasefire between Israel and Iran has led investors to reassess gold's appeal as a safe haven.
- Traders are awaiting U.S. inflation data, which could influence expectations for future Federal Reserve rate cuts.
- Technical analysis indicates a bearish trend for gold, with immediate support at $3,311 and potential declines towards $3,283.
Gold slid to $3,298 on Friday, heading for its second straight weekly decline as geopolitical easing and a modest uptick in the U.S. dollar cooled demand for safe havens. The Israel-Iran ceasefire, which ended nearly two weeks of military tension, prompted investors to reassess gold’s near-term appeal. Traders now await fresh cues from U.S. inflation data before placing their next big bets.
“The peace deal has calmed nerves,” said Brian Lan of GoldSilver Central. “We’re seeing consolidation with a bearish tilt, but no major panic.”
The shift to risk-on sentiment comes as life in both Iran and Israel returns to normal after 12 intense days of conflict. While the geopolitical premium fades, macro traders are watching for today’s U.S. core personal consumption expenditure (PCE) report—one of the Fed’s preferred inflation measures. Markets expect a monthly rise of just 0.1%, with annual inflation likely easing to 2.6%.
Fed Cut Hopes Keep Traders Cautious
The path of gold will depend heavily on whether inflation comes in cool enough to justify policy easing. Markets are currently pricing in a 63-basis-point rate cut in 2024, likely beginning in September. President Donald Trump has been vocal, arguing the Fed should already be cutting rates given tame inflation.
Still, only two Fed officials have publicly supported a July cut so far. Gold, which yields no interest, tends to benefit in low-rate environments because the opportunity cost of holding it decreases.
There’s also early talk of speculative capital rotating into other precious metals like platinum and palladium, according to Marex analyst Edward Meir.
Technical Breakdown Eyes $3,283 Support
On the 2-hour chart, gold has confirmed a descending triangle breakdown after failing to hold trendline support. Price action is clearly bearish, with a lower high forming below $3,334—now serving as resistance. Momentum indicators reinforce the downtrend:
- The 50-period EMA has turned south and capped recent rallies
- MACD lines are widening lower, with histogram bars deep in the red
- A bearish engulfing candle followed by a strong red bar confirms seller control
Immediate support sits at $3,311. A break below could accelerate declines toward $3,283, with further downside risk to $3,246 or even $3,209 if selling pressure intensifies.
Trade Setup:
Short positions below $3,311 look favorable, targeting $3,283. Conservative traders may wait for a retest of $3,311 as resistance. Stop-loss levels above $3,335 can help manage risk.
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