GOLD: Critical $4K Support Zone Under Threat as Global Tensions Escalate
Gold started the week on a weaker footing, opening nearly $20 lower on Monday as the latest escalation in Middle East tensions intensified inflation concerns and reinforced expectations that the Federal Reserve may maintain higher interest rates for longer, or even consider additional rate hikes. This backdrop continues to underpin the U.S. dollar and weigh on the non-yielding precious metal.
Investors are now turning their attention to a busy week of key macroeconomic events, including the release of the U.S. June CPI report and Fed Chair Kevin Warsh’s semiannual testimony before Congress. Both are expected to provide fresh clues on the inflation outlook, economic conditions, and the future path of monetary policy.
From a technical perspective, the daily chart remains predominantly bearish. Multiple death crosses formed throughout June (20-, 30-, and 55-day moving averages crossing below the 200-day moving average), while 14-day momentum remains in negative territory and the RSI continues to hold below the 50 mark, highlighting persistent downside pressure.
The latest pullback following a failed recovery attempt shifts the near-term focus back to the downside. Bears need a weekly close below Fibonacci support at $4,076—a level that has repeatedly contained downside attempts—to expose the critical $4,000 and $3,950 support zones. A decisive break below these key levels, after several failed attempts, would likely confirm a continuation of the broader downtrend from the record high.
On the upside, the falling 20-day moving average at $4,118 represents the first significant resistance, followed by the key barrier at $4,203, which marks the July 6 recovery peak. A sustained move above these levels would be required to ease immediate bearish pressure and improve the near-term outlook.
