Gold Bearish in the Short Term Amid Middle East Ceasefire and Fed’s Wait-and-See Stance

Commodity

Summary:

Recently, Israel and Iran reached a ceasefire agreement, causing the market’s risk-aversion sentiment to ebb and consequently pushing down gold prices. However, the conflict between the two countries may not have come to a complete end, and there is still potential for gold prices to rise.

SELL XAUUSD

Close Time

CLOSED

3323.73

Entry Price

3250.00

3370.00

4209.90 +11.99 +0.29%

493.9

Pips

Profit

3250.00

3274.34

Exit Price

3323.73

Entry Price

3370.00

Fundamentals

The recent phased easing of the Middle East situation has directly triggered the decline in gold prices. Israel and Iran, with Trump’s mediation, reached a ceasefire agreement, and both sides have resumed the opening of their airspace. Iran’s foreign minister explicitly stated a “willingness to resolve differences through negotiations,” and the risk of the Strait of Hormuz being blockaded has significantly diminished. The risk premium on gold, which had been inflated by geopolitical conflicts, was quickly reversed, with gold prices plummeting by 46.06 dollars in a single day yesterday. As a result, funds have accelerated their exit from gold, shifting towards risk assets such as the stock market.

Meanwhile, the Federal Reserve’s wait-and-see stance on monetary policy has further suppressed gold prices. Powell emphasized at the congressional hearing the need for more time to assess the impact of tariffs on inflation and hinted at a reduced likelihood of interest rate cuts before September. The market’s expectation for a rate cut in July has plummeted from 35% to 12%, and the US dollar index has stabilized above 98.00, diminishing the appeal of gold, a non-interest-bearing asset.

It is important to note that, despite the ceasefire agreement between Iran and Israel, there is still the possibility of renewed conflict between the two countries. Should the conflict flare up again, gold prices could once again find support and rise.

Technical Analysis

From the 4-hour chart perspective, the short-term upward trend line of gold has already been breached. The likelihood of a short-term trend reversal to the downside is gradually increasing. Moreover, the MA20 crossing below the MA60 and MA144 to form a “death cross” has further heightened the probability of a short-term decline in gold prices.

Currently, gold prices rebounded after falling to the support level near 3292.00 yesterday. Today, the rebound has continued, but in the short term, there is a resistance level at 3350.00 above. If gold prices weaken under this resistance level, they may once again test the support level at 3292.00. Should this support level be breached, the downside space for gold prices will be opened up, with the next target potentially falling to around 3245.00.

Trading Recommendations

Trading Direction: Sell

Entry Price: 3340.00

Target Price: 3250.00

Stop Loss: 3370.00

Valid Until: July 09, 2025, 23:00:00

Support: 3295.39/3245.33

Resistance: 3340.24/3357.71

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

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Eva Chen

Central Bank

Summary:

According to the European Central Bank (ECB) Governing Council, further easing of monetary policy may be warranted if the euro's strength persists, while downplaying the risks associated with tariffs.

BUY EURNZD

EXP

EXPIRED

1.91200

Entry Price

1.93890

1.90010

2.01345 -0.00206 -0.10%

Pips

EXPIRED

1.90010

1.95463

Exit Price

1.91200

Entry Price

1.93890

Fundamentals

Villeroy de Galhau, a member of the ECB's Governing Council, indicated that further monetary easing might be warranted later this year if the recent appreciation of the euro continues to mitigate inflationary pressures stemming from rising oil prices.

In an interview with the Financial Times, Villeroy stated that "inflation expectations remain moderate," and that the currency's appreciation would help offset energy-driven price pressures. He added, "If this scenario materializes, further easing could be considered within the next six months."

Policymakers will proceed cautiously unless short-term oil price volatility translates into broader inflation risks. He further noted, "We may adjust monetary policy if we observe spillover effects into underlying inflation, leading to a de-anchoring of inflation expectations."

In the realm of trade, Villeroy dismissed apprehensions that escalating U.S.-EU tensions would trigger significant inflation within the Eurozone. He posited that the primary risk resides in economic growth rather than price levels, given that EU tariffs would exclusively target U.S. goods, unlike Washington's broader measures. The strengthening euro also serves as a buffer, mitigating the impact of any imported inflation.

Currently, the EURNZD is trading at 1.9233. The market dynamics are influenced by the divergence in monetary policies between the ECB, which recently lowered interest rates, and the Reserve Bank of New Zealand, which has either concluded or is nearing the end of its easing cycle, coupled with fluctuating risk sentiment. In the short term, the EURNZD lmay face downward pressure if Eurozone data continues to underperform and the New Zealand dollar remains robust due to commodity price support. Conversely, a resurgence in risk appetite in the U.S. and Europe, or unexpected inflationary pressures in Europe, could potentially drive a rebound in the euro.

Are Tariffs' Impacts Manageable? Will the ECB Cut Rates Again in the Second Half of the Year?_1

Technical Analysis

Technically, the EURNZD has retraced significantly from Monday's high of 1.9488, aligning with its recent volatile behavior. Despite signs of a slowdown in the current decline, the 4-hour chart still exhibits a downward death cross, suggesting the downtrend is not yet exhausted. Further declines may test the 50-day SMA near 1.9150 or the demand zone around 1.9076. As a critical juncture for supply and demand, a potential rebound could occur if market risk sentiment improves, with a break above 1.9350 potentially revisiting recent highs.

Considering both fundamental and technical aspects, the EURNZD remains within a range-bound pattern. A buy-on-dip strategy is favored for the medium term, but close attention should be paid to the breach of the 1.9077–1.9021 range. Furthermore, monitoring upcoming decisions from the ECB and the Reserve Bank of New Zealand, along with key economic data releases, is crucial for adapting trading strategies.

Trading Recommendations

Trading Direction: Buy

Entry Price: 1.9120

Target Price: 1.9389

Stop Loss: 1.9001

Valid Until: July 9, 2025 23:55:00

Support: 1.9210, 1.9160, 1.9110

Resistance: 1.9313, 1.9331, 1.9353

Risk Warnings and Disclaimers

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Manuel

Forex

Central Bank

Summary:

These moving averages form a technical confluence zone that may act as a magnet for price action during a corrective move.

SELL GBPUSD

Close Time

CLOSED

1.36239

Entry Price

1.35100

1.36800

1.33185 -0.00127 -0.10%

56.1

Pips

Loss

1.35100

1.36801

Exit Price

1.36239

Entry Price

1.36800

Consumer sentiment in the United States deteriorated notably in June, with the Conference Board’s Consumer Confidence Index falling to 93.0 from 98.4 in May. This marked a sharper-than-expected decline and underscored growing concerns about the economic outlook among U.S. households.

The Present Situation Index fell by 6.4 points to 129.1, while the Expectations Index dropped 4.6 points to 69.0. According to Stephanie Guichard, Senior Economist for Global Indicators at the Conference Board, “Consumers were less optimistic about current business conditions compared to May. Their assessment of job availability weakened for the sixth consecutive month, although it remains in positive territory—consistent with a labor market that is still relatively strong.”

Markets took a breather as geopolitical tensions eased slightly. U.S. President Donald Trump announced a ceasefire between Iran and Israel—described by him as the end of the "12-Day War"—which helped calm global risk sentiment and reduced safe-haven inflows into the U.S. dollar.

Beyond geopolitics, monetary policy remained in focus. In prepared remarks for his congressional testimony, Federal Reserve Chair Jerome Powell signaled that rate cuts may not be imminent, noting that the Fed is carefully monitoring the economic impact of tariffs. He acknowledged that “this year’s tariffs are likely to raise prices and weigh on economic activity,” but added that the extent and persistence of their impact remains uncertain.

Powell’s comments contrasted with the more dovish stance recently taken by Fed Governors Christopher Waller and Michelle Bowman—two officials who were among the more hawkish voices last year and had previously supported a rate cut as early as July.

Adding to the narrative of delayed policy easing, Cleveland Fed President Beth Hammack, traditionally considered a hawk, stated that rate cuts could remain “on hold for quite some time.” Her comments echoed those of Atlanta Fed President Raphael Bostic, who recently said there is currently no urgency to cut rates, and projected only a single 25-basis-point reduction this year.

Across the Atlantic, Bank of England Deputy Governor Dave Ramsden indicated on Tuesday that rate cuts could be accelerated if stronger evidence emerges that inflation will undershoot the central bank’s target. Speaking to Reuters, Ramsden highlighted the material uncertainty surrounding how the UK economy is responding to recent shocks. “In the near term, my focus will likely remain on the domestic side of the economy,” he noted, while also acknowledging that the UK faces a challenging fiscal environment. He added that recent bond market movements have been orderly despite prevailing headwinds. Resistance at Local High Could Trigger GBPUSD Correction_1

Resistance at Local High Could Trigger GBPUSD Correction_1

Technical Analysis

GBP/USD recently reached a local high at 1.3648, only to reverse lower shortly afterward. This area has acted as a key resistance zone in the past—particularly near the 1.3610 level—and could once again serve as a pivot point for a downside correction. Previous interactions with this level have triggered pullbacks, suggesting that if the pattern holds, bearish momentum could resume, targeting the 1.3510 zone.

This target aligns with the 0.50 Fibonacci retracement level, which coincides with a historically significant support area. The price has shown directional changes around this level in the past, making it a logical area to watch for potential buying interest.

Further reinforcing this scenario, the 100- and 200-period moving averages on the 1-hour chart are located at 1.3473 and 1.3508, respectively. These moving averages form a technical confluence zone that may act as a magnet for price action during a corrective move.

Adding to the case for a pullback, the Relative Strength Index (RSI) recently surged to 79.9—well above the 70 threshold that signals overbought conditions. A bearish reaction from such elevated levels often indicates a market that has become overextended, increasing the likelihood of a short-term retracement as bullish momentum temporarily fades.

Trading Recommendations

Trading direction: Sell

Entry price: 1.3624

Target price: 1.3510

Stop loss: 1.3680

Validity: Jun 30, 2025 15:00:00

Risk Warnings and Disclaimers

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Warren Takunda

Economic

Summary:

The Pound Sterling rose to a weekly high of 1.3626 against the US Dollar on Tuesday, boosted by resilient market risk appetite and cautious signals from the Fed.

BUY GBPUSD

Close Time

CLOSED

1.36200

Entry Price

1.38000

1.35100

1.33185 -0.00127 -0.10%

98.9

Pips

Profit

1.35100

1.37189

Exit Price

1.36200

Entry Price

1.38000

The British Pound extended its recent rally against the US Dollar on Tuesday, breaking above the psychological 1.3600 mark and hitting a weekly high of 1.3626, as a breakdown in the Israel-Iran ceasefire failed to rattle global markets. Investors remained largely risk-on, shrugging off geopolitical escalation and hawkish rhetoric from US Federal Reserve officials, including Chair Jerome Powell, who reiterated that rate cuts were not imminent.

By the close of European trading, GBP/USD had gained over 0.65%, positioning Sterling as one of the best-performing majors on the day. The move higher came despite a relatively light UK data calendar and fresh evidence of labor market weakness flagged by Bank of England Deputy Governor Dave Ramsden.

The latest leg higher for Sterling came after renewed violence in the Middle East, where both Israel and Iran were accused of violating a previously brokered ceasefire agreement. Despite warnings from US President Donald Trump urging restraint, the conflict appears to be re-escalating, raising broader concerns over regional stability and potential oil supply disruptions.

Ordinarily, such developments would trigger safe-haven flows into the US Dollar. But on Tuesday, that inverse relationship faltered. Markets instead leaned toward optimism, viewing the flare-up as unlikely to derail the broader macroeconomic picture or immediate monetary policy paths. As a result, risk-sensitive currencies like Sterling capitalized on subdued USD demand.

Fed Chair Jerome Powell delivered prepared remarks to the US Congress that further dampened hopes of a near-term rate cut, reinforcing the central bank’s commitment to a data-driven path. Powell warned that “tariffs this year are likely to push up prices and weigh on economic activity,” a remark that adds complexity to an already ambiguous policy backdrop.

He also suggested the Fed would continue to assess how inflation evolves in light of these pressures, stating that it was too early to commit to any specific easing schedule. The comments contrasted with earlier dovish hints from Fed Governors Waller and Bowman, but aligned with more recent statements from other officials.

Cleveland Fed’s Beth Hammack, known for her hawkish leanings, recently said cuts may be “on hold for quite some time,” while Atlanta Fed President Raphael Bostic reiterated his forecast of just one 25 basis point cut this year — if any. These comments collectively cooled expectations for a July move, even as markets still price in at least one cut before year-end.

Back in the UK, domestic data offered little to change the narrative. The CBI Industrial Trends Survey indicated a slight improvement in sentiment among manufacturers, with output volume expectations easing from -25 to -23 in the three months to June. However, the survey remained firmly in contractionary territory, reflecting subdued industrial activity.

More notable were remarks from BoE Deputy Governor Dave Ramsden, who emphasized that “cumulative evidence of material loosening in the labour market” influenced his vote at the last Monetary Policy Committee (MPC) meeting. Ramsden pointed to mounting signs of employment softness, suggesting that further data confirming these trends could tip the BoE toward a more dovish outlook later this year.

With UK inflation gradually easing and wage growth showing signs of cooling, markets are beginning to anticipate a potential rate cut from the BoE as early as August — though policymakers remain divided on the exact timeline.

Technical Analysis

From a technical standpoint, GBP/USD is exhibiting signs of sustained bullish momentum. The pair has decisively broken above its 50-day exponential moving average (EMA), which had previously acted as dynamic resistance. The recent surge confirms the formation of a new short-term bullish trendline, supported by robust intraday demand and RSI-positive divergence.

Additionally, the pair has successfully breached the upper boundary of a falling wedge formation — a classic bullish continuation pattern — reinforcing prospects for further upside. So long as GBP/USD holds above the breakout zone around 1.3580–1.3600, the bullish case remains intact, with scope for a push toward 1.3680 and potentially 1.3800 in the near term.

TRADE RECOMMENDATION

BUY GBPUSD

ENTRY PRICE: 1.3620

STOP LOSS: 1.3510

TAKE PROFIT: 1.3800

Risk Warnings and Disclaimers

Add to Favorites

Warren Takunda

Commodity

Summary:

Gold prices plunged to near $3,320 during Tuesday's European session as easing geopolitical tensions following a ceasefire between Israel and Iran dampened safe-haven demand.

SELL XAUUSD

Close Time

CLOSED

3305.00

Entry Price

3200.00

3400.00

4209.90 +11.99 +0.29%

304.7

Pips

Profit

3200.00

3274.53

Exit Price

3305.00

Entry Price

3400.00

Gold (XAU/USD) extended its slide sharply on Tuesday, falling to as low as $3,320 in European trading hours as investors offloaded the precious metal amid fading geopolitical risks in the Middle East. The sharp move lower comes after former U.S. President Donald Trump announced a ceasefire between Israel and Iran, putting a halt to nearly two weeks of aerial hostilities that had previously underpinned safe-haven flows into gold.

“The ceasefire is now in effect. Please do not violate it!” Trump posted on Truth Social, confirming an agreement between the two adversarial nations to end the 12-day conflict. The news prompted a swift reassessment of risk sentiment in global markets, causing safe-haven assets such as gold, U.S. Treasuries, and the Japanese Yen to weaken while equities and risk currencies saw renewed bids.

Despite the ceasefire, Israeli Prime Minister Benjamin Netanyahu maintained a cautious stance, warning that Israel’s defense forces remain on alert and will respond "forcefully" should Iran breach the terms of the truce. However, for now, markets are treating the development as a signal that geopolitical risk premiums can be dialed down — at least temporarily.

While the de-escalation in the Middle East has sparked a sell-off in gold, some investors believe the downside could be limited due to a notable shift in the Federal Reserve’s policy tone. Speaking in Prague on Monday, Fed Vice Chair Michelle Bowman struck a dovish note, signaling that rate cuts could be on the table sooner than previously expected if inflation remains subdued.

“Should inflation pressures remain contained, I would support lowering the policy rate as soon as our next meeting in order to bring it closer to its neutral setting and to sustain a healthy labor market,” Bowman said. Her comments come amid growing concerns about labor market softness and the limited inflationary impact of Donald Trump’s proposed tariff agenda should he return to office in the upcoming U.S. elections.

Gold, a non-yielding asset, tends to benefit from lower interest rates as they reduce the opportunity cost of holding the metal. With the Fed now tilting more dovish — and the U.S. Dollar (USD) retreating as a result — the outlook for gold remains nuanced. While geopolitical fears may be easing, the fundamental backdrop for precious metals could strengthen in the coming weeks if the Fed follows through with rate cuts.

Technical Analysis

From a technical standpoint, the gold market is currently trading within a well-defined bearish correctional channel, with the recent breakdown of a key ascending trendline reinforcing downside risks. The price action has been dominated by selling pressure, and the violation of this trendline has opened the door for a deeper retracement, especially as momentum indicators confirm the bearish bias.

The Relative Strength Index (RSI) has entered oversold territory, yet remains aligned with negative momentum — a classic sign that the bears are firmly in control. Despite oversold conditions, there is little evidence of a near-term reversal, particularly given the broader macro backdrop and weakening demand for safe havens.

If the downside persists, traders may target further support levels around $3,300 and potentially $3,200, both of which served as key inflection points in prior consolidation phases. On the flip side, any recovery will likely face resistance at the $3,350–$3,370 zone, where the previous trendline intersects with short-term moving averages.

TRADE RECOMMENDATION

SELL GOLD

ENTRY PRICE: 3305

STOP LOSS: 3400

TAKE PROFIT: 3200

Risk Warnings and Disclaimers

Add to Favorites

Warren Takunda

Economic

Summary:

The US Dollar slumped on Tuesday, extending losses as easing geopolitical tensions and a dovish Federal Reserve outlook crushed demand for safe-haven assets.

SELL USDX

EXP

EXPIRED

98.200

Entry Price

94.000

99.300

98.890 -0.060 -0.06%

Pips

EXPIRED

94.000

97.090

Exit Price

98.200

Entry Price

99.300

The US Dollar came under heavy selling pressure on Tuesday, becoming one of the worst-performing major currencies amid a potent mix of geopolitical de-escalation and growing expectations for a more accommodative Federal Reserve stance. Risk appetite surged across global markets following confirmation of a ceasefire between Israel and Iran, while a chorus of dovish signals from Federal Reserve officials further undermined the greenback’s appeal.

The US Dollar Index (DXY), which tracks the performance of the Dollar against a basket of six major peers, slumped nearly 1.4% from Monday’s highs, erasing nearly all of its gains from the past two weeks. At the time of writing, the index is hovering below 97.80, eyeing its next major test near the critical three-year support level at 97.13 — a zone that, if broken, could mark a significant structural shift in the broader trend.

Markets responded swiftly to Monday evening’s announcement by US President Donald Trump confirming a ceasefire agreement between Israel and Iran. The news sparked a rally in risk assets, pushing European equities sharply higher and sending crude oil prices tumbling more than $10 from their intraday highs. In contrast, traditional safe-haven assets such as the US Dollar and Treasury yields retreated as investors rotated into riskier plays.

Despite ongoing tensions — with Tel Aviv warning of retaliation over alleged ceasefire violations, and Tehran firmly denying any breach — the overall market mood remained buoyant on Tuesday. Risk sentiment has reasserted itself, sidelining the greenback and leaving it vulnerable to further pullbacks as geopolitical risk premia evaporate.

Amplifying the Dollar's downward momentum were recent comments from key Federal Reserve officials, which solidified investor expectations for rate cuts in the second half of the year. The softening macroeconomic backdrop — characterized by moderating inflation and a weakening labor market — appears to be nudging the central bank toward a more accommodative stance.

On Monday, Federal Reserve Vice Chair for Supervision Michelle Bowman joined Governor Christopher Waller in signaling that the case for easing is gaining ground. Bowman noted that the inflationary impact of US tariffs was likely to be less severe than initially feared, potentially opening the door for rate cuts to support the labor market. Waller, known for his previously hawkish leanings, also leaned toward July as a viable window for the Fed’s first policy pivot since tightening began.

Markets are now pricing in a growing probability of a rate cut in September, if not as early as July, particularly if incoming data continues to show signs of slack in the economy.

All eyes will be on Federal Reserve Chair Jerome Powell later today, as he prepares to deliver semi-annual testimony to Congress. Traders will be combing through his remarks for confirmation of the dovish tilt and clues about the timing of potential easing. Any suggestion that the Fed is leaning toward insurance cuts to preempt a broader slowdown could trigger a deeper correction in the Dollar.

Technical Analysis

Technically, the US Dollar Index appears to be teetering on the edge of a major bearish reversal. The DXY has been repeatedly rejected at the Daily Swing Supply Zone near the 99.00 level, and recent price action has confirmed a Head & Shoulders formation on the 1-hour chart — typically a strong signal of trend exhaustion.

On the 4-hour chart, price remains firmly below the 100-period EMA, while a well-respected descending trendline continues to cap upside attempts. Momentum indicators also paint a bearish picture, with a clear RSI divergence reinforcing downside pressure.

The current pivot sits at 98.59, but with price now trading below the 1st support at 97.69, the path of least resistance appears to be lower. A sustained break below the 97.13 multi-year support would expose the next major downside target at 94.650 — a level that aligns with long-term Fibonacci retracements and previous structural demand zones.

TRADE RECOMMENDATION

SELL DXY

ENTRY PRICE : 98.200

STOP LOSS: 99.300

TAKE PROFIT: 94.00

Risk Warnings and Disclaimers

Add to Favorites

Eva Chen

Commodity

Central Bank

Summary:

If Federal Reserve Chairman Powell signals further rate cuts during his testimony before Congress later today, the U.S. dollar may experience further depreciation, potentially bolstering gold prices following their recent significant decline.

SELL XAUUSD

Close Time

CLOSED

3348.00

Entry Price

3259.00

3398.00

4209.90 +11.99 +0.29%

890.0

Pips

Profit

3259.00

3258.66

Exit Price

3348.00

Entry Price

3398.00

Fundamentals

Gold prices initially sustained a robust bearish sentiment during Tuesday's early European session, subsequently moderating, yet still hovering near a two-week low. The news of a ceasefire between Iran and Israel bolstered investor confidence, triggering a fresh wave of global risk-on trading, which is perceived as a primary factor contributing to the outflow of funds from the safe-haven asset.

Tensions escalated yesterday following Iran's missile strikes on U.S. airbases in Qatar and Iraq. However, the situation de-escalated as Trump welcomed the pre-warned attacks, characterizing them as a "very weak response," with no reported casualties.

Brent crude experienced one of its largest single-day declines in five years, decreasing by over US$7 per barrel since yesterday, as the immediate threats in the Strait of Hormuz subsided. Gold prices also retreated significantly due to the easing geopolitical tensions.

With the geopolitical situation stabilizing, the focus will shift to Federal Reserve Chairman Powell's testimony before the House Financial Services Committee later today, which may offer insights into the future path of interest rate cuts.

Following support for a rate cut as early as July from Federal Reserve Governors Waller, Goolsbee, and Bowman, Powell's stance suggests an increased risk of a rate cut. The market may interpret any shift in Powell's cautious approach to rate cuts as a sign that pressure from Trump to lower rates has breached the "firewall of the Fed's independence." This could lead to a further decline in the dollar and provide additional trading opportunities for gold in the short term.

Geopolitical Tensions Have Eased, Shifting the Focus to Powell's Semiannual Testimony_1

Technical Analysis

The recent pullback in gold prices, driven by the exhaustion of bullish momentum, aligns with expectations. While prices briefly found support during Tuesday's European session, consolidation is anticipated to dominate trading in the coming sessions. However, the current market structure suggests that the path of least resistance post-consolidation remains downward.

Given the price breakdown, it is recommended to go short at the highs within the US$3,349-US$3,352 range (the second point of origin for medium-term short positions, following the initial sell-off at US$3,378). The target range is US$3,271-US$3,259. A decisive break below this range would likely attract additional short positions, potentially driving prices lower towards the US$3,245-US$3,200 threshold.