Gold (XAU/USD) is resuming its downtrend toward two-week lows near $3,985 early Wednesday, following a temporary pullback seen on Tuesday, as there seems to be no end to renewed hostilities between the United States (US) and Iran concerning the Strait of Hormuz.
Sellers Are Back in Control
In the latest US escalation, President Donald Trump on Tuesday stated that the US had reimposed a naval blockade of all Iranian ports and threatened to hit power plants and bridges next week unless Tehran resumes negotiations. Trump added that Washington had urged Iran to reach an agreement.
On the Iranian side, the Islamic Revolutionary Guards Corps (IRGC) declared on Wednesday that the “Strait of Hormuz will remain closed until the end of America’s evils.” The IRGC also confirmed attacks on several US bases across Gulf states including Kuwait, Bahrain and Jordan, citing them as a response to US hostilities. US CENTCOM confirmed in turn that it struck dozens of military sites near the Strait of Hormuz and the Iranian coast.
▼ This escalation is driving another leg up in oil prices, with WTI sitting close to monthly highs above $80.50. Markets remain concerned that surging oil prices could aggravate inflation worries and prompt the Fed to deliver on its two rate hike projections for 2026 — a clear negative for non-yielding gold.
Fed Dynamics: Soft CPI vs. Hawkish Warsh
US core inflation (excluding food and energy) was flat on the month, putting the 12-month rate at 2.6% — undershooting expectations of 0.2% MoM and 2.9% YoY. Softer inflation data briefly supported gold buyers.
However, Fed Chair Kevin Warsh's congressional testimony quickly tempered optimism. Warsh stated:
“There might be some that look at this morning’s data and say, ‘Oh, mission accomplished, everything is swell.’ That is not my view.”
The FXS Fed Sentiment Index remained at an elevated 127.19 — well above the neutral 100 mark — confirming the overall policy tone remains firmly in hawkish territory. With Warsh due to testify again before the Senate Committee on Banking later today alongside the US PPI release, the near-term directional bias for gold is unchanged: bearish on rallies.
Gold Technical Analysis: Daily Chart
The daily chart for XAU/USD paints a clear bearish near-term picture. Gold is trading around $4,030, sitting below all major moving averages — a technically weak position.
| Moving Average | Level (USD/oz) | Signal |
|---|---|---|
| 21-day SMA | $4,098 | Resistance |
| 50-day SMA | $4,319 | Key Barrier |
| 100-day SMA | $4,559 | Far Above |
| 200-day SMA | $4,495 | Far Above |
| RSI (14) | 40.38 | Mildly Bearish |
The RSI at 40.38 sits in mildly negative territory, hinting at persistent downside pressure rather than an oversold condition that would invite dip-buying. The clustering of 100-day and 200-day SMAs well above at $4,495–$4,559 forms a formidable resistance band that is likely to cap any meaningful recovery attempts.
Key Technical Levels
▲ Resistance Levels
▼ Support Levels
Gold Price Forecast: Our View for July 15–22, 2026
Our analysis concurs with the prevailing technical picture: gold remains a sell-on-rise trade in the current environment. The Hormuz crisis creates a paradox for gold — while geopolitical tension normally supports safe-haven demand, the oil price surge it generates stokes inflation fears and reinforces the Fed’s hawkish stance, which is structurally negative for non-yielding gold.
We expect $3,985 to be tested by end of week. If the naval standoff deepens without diplomatic breakthrough, a slide toward $3,900 becomes our base case. Only a clear daily close above the 21-day SMA at $4,098 would shift our bias neutral. A close above $4,200 would be needed to turn bullish.
What to Watch Next
- US PPI Data (July 15): A softer factory-gate inflation print could trigger a short-term gold bounce, but sellers are likely to re-emerge on any strength toward the 21-day SMA at $4,098.
- Fed Chair Warsh Senate Testimony: Any hawkish tilt in wording will reinforce downside pressure. A dovish surprise could fuel a corrective rally — but is unlikely given current oil-driven inflation concern.
- Strait of Hormuz Developments: Any ceasefire signal or diplomatic breakthrough would remove the oil risk premium and could trigger a sharp short-covering bounce in gold. This is the key upside risk to our bearish forecast.
- US Dollar Direction: DXY remaining soft provides a partial floor for gold. A dollar recovery alongside hawkish Fed would compound gold’s downside.
🥇 Bottom Line — Achiever Global Markets
Gold is caught in a classic geopolitical paradox: the same crisis (US–Iran/Hormuz) that would normally send it higher is simultaneously pushing oil prices up, feeding inflation, and keeping the Fed hawkish — all of which cap gold’s upside. Sell rallies into $4,050–$4,098 with a stop above $4,150. Target $3,985 initially and $3,900 on a break. Reassess only on a confirmed close above $4,200.
Disclaimer: This analysis is for informational purposes only and does not constitute investment advice. Past performance is not indicative of future results. Gold and commodity trading involves substantial risk of loss. Market data and technical levels referenced from public sources as of 15 July 2026.