Gold recovers from weekly low amid safe-haven demand, despite firm Dollar

Tensions in the Middle East escalated as US President Donald Trump held a Situation Room meeting to discuss potential military action against Iran amid the ongoing Israel-Iran conflict. Reports suggest Trump has approved attack plans but remains cautious about triggering a prolonged war.

Uncertainty also deepened after Trump hinted at upcoming tariffs on the pharmaceutical sector, adding pressure to global markets and offering some support to safe-haven assets like gold.

On the monetary front, the Federal Reserve kept interest rates unchanged, as expected, but projected two rate cuts by the end of 2025.This hawkish tone has strengthened the US Dollar, limiting gold’s upside despite geopolitical support. With US banks closed on Thursday for Juneteenth and no major economic data scheduled, XAU/USD remains driven by broader market sentiment and USD fluctuations in a low-liquidity environment.

XAU/USD TECHNICAL OVERVIEW

Technical Structure: Gold continues to show signs of weakness, reflected in a bearish daily candle that reinforces selling pressure. On the 4-hour chart, a bear flag pattern is developing, suggesting the potential for further downside continuation. The 1-hour timeframe shows a falling broadening wedge, typically a sign of volatility with bearish bias. Additionally, the 15-minute chart has formed a continuation head and shoulders pattern, hinting at short-term breakdown risk.

Intraday Trend/ Intraday Strategy: Intraday Trend remains bearish to neutral, with a strategy focused on selling near resistance levels and shorting on support breaks.

Weekly Trend: Neutral

Major Support: 3369, 3362, 3355

Major Resistance: 3376, 3384, 3396