Gold stalls below $4,100 as USD rebounds and Fed hike odds rise

Gold fell to $4,082.83 on Friday, snapping a brief rally above $4,100 but keeping the metal on track for a four‑month losing streak as sellers reclaimed control amid a firmer U.S. dollar and higher odds of a July Fed rate hike.

Dollar strength and Fed expectations

The greenback rebounded from six‑week lows after fresh U.S.–Iran tensions and a mixed batch of U.S. macro data, lifting the dollar to three‑week highs. Market pricing now shows a 38% chance of a 25‑basis‑point Fed hike at the July meeting, up from 16% a week earlier, according to the CME Group’s FedWatch Tool. This hawkish tilt has bolstered short‑term Treasury yields, pulling demand away from non‑yielding assets like gold.

Technical picture and near‑term bias

On the daily chart, gold sits below its 21‑day simple moving average at $4,073.95, with the 50‑day SMA at $4,185.76 forming the nearest resistance. The Relative Strength Index sits at 48.3, indicating muted upside momentum. A close above the 50‑day SMA would be needed to ease bearish pressure, while a break beneath the 21‑day SMA could expose lower support levels.

Market backdrop and risk factors

Beyond the dollar’s resurgence, gold is pressured by disappointing Chinese July business PMI data and heightened caution ahead of the Bank of Japan’s policy decision. A potential hawkish stance from the BoJ could revive yen buying, weakening the dollar and offering a tailwind for gold, but escalating Middle‑East hostilities would likely reinforce dollar safe‑haven demand, further suppressing the metal.

What to watch

• Fed meeting (July 31) – A confirmed rate hike or pause will shape dollar strength and gold’s direction.
• Key technical levels – $4,073.95 (21‑day SMA support) and $4,185.76 (50‑day SMA resistance).
• BoJ policy outcome – A hawkish hold could shift risk sentiment and impact gold’s upside potential.

Gold’s inability to sustain above $4,100 underscores the dominance of dollar‑driven risk aversion, leaving the metal vulnerable unless a shift in monetary policy or geopolitical risk alters the balance.