Gold hovered just above $4,050 per ounce on Tuesday, holding firm near the $4,000 support level despite pressure from a strong U.S. dollar and rising real yields. Traders are cautious ahead of the Federal Reserve’s upcoming policy announcement, with technical indicators signaling a delicate balance between bulls and bears.
Technical Struggles and Dollar Influence
On the four-hour chart, gold sits under its 50-period exponential moving average at about $4,065, suggesting sellers have a short-term edge. The relative strength index (RSI) stands near 44.8, below neutral territory but above oversold levels, hinting at possible stabilization rather than a sharp fall. The critical support remains at $4,000, a psychological barrier that buyers have defended multiple times. A sustained drop below that could expose $3,950 as the next key downside level.
The U.S. Dollar Index trades around 101.50, slightly above its 50-period moving average of 101.19, with momentum favoring the dollar. A move past 101.60 101.80 could push gold lower, while a dip under 101.20 might help gold gain ground. Meanwhile, the 10-year real Treasury yield touched 2.43% recently, increasing the opportunity cost of holding non-yielding assets like gold and adding to selling pressure.
Despite these headwinds, gold demand remains solid. Central banks added a net 41 metric tons in May, and China’s net gold imports via Hong Kong surged to over 50.6 tons in June, more than doubling year-over-year. This ongoing appetite helps gold resist sharper declines ahead of the Fed’s verdict, expected Wednesday.
This content is for informational purposes and does not constitute financial advice.
