The ghost of inflation returns! The Federal Reserve is forced to show its "hawkish claws", gold crawls below the 200-day moving average—is a bigger crisis ahead?
Huitong Network, July 9—— During Asian trading hours on Thursday, spot gold maintained a narrow range of fluctuations. The weak US dollar provides support, but the ongoing escalation of the US-Iran conflict fuels concerns over energy-driven inflation, strengthening expectations for Federal Reserve rate hikes (with about a 70% probability of a hike in September), offsetting the positive impact of the weak dollar.
On Thursday (July 9) during Asian trading hours, spot gold prices fell into a consolidation pattern after rebounding from the $4,020/oz zone (weekly low) the previous day, and are currently trading near $4,090/oz.
The US dollar remains on the defensive in the absence of clear hawkish signals from the Federal Reserve minutes, which should typically support gold.
However, the ongoing escalation of the US-Iran conflict has reignited inflation concerns and further solidified market expectations for a Federal Reserve rate hike in 2026, which has somewhat limited the dollar’s decline and continues to put pressure on non-yielding gold.
Fundamentals: Mixed Bullish and Bearish Factors, Gold Faces Directional Decision
The gold market is currently in a delicate balance between bulls and bears. On the bullish side, the US Dollar Index failed to receive new hawkish catalysts after the release of the FOMC minutes and remains defensive, providing traditional support for dollar-denominated gold.
The minutes show there is internal disagreement among policymakers regarding the direction of interest rates—many participants believe rates may stay at or just below current levels by year-end—weakening the narrative for a unilateral dollar rally.
However, bearish factors should not be ignored. The minutes also clearly point out that the risk of rising inflation remains high, and mention that “some policy tightening may be needed to bring inflation back to 2%.” This statement has reinforced market expectations for the Federal Reserve’s continued tightening stance. According to the CME FedWatch tool, traders are now pricing in about a 70% probability of a rate hike in September.
More crucially, there are geopolitical factors at play. On Wednesday, the US military launched a new round of strikes against Iran in retaliation for Iran’s attacks on commercial vessels in the Strait of Hormuz. Iran, in turn, continues retaliatory strikes against US military targets in Bahrain and Kuwait. On the same day, Trump announced that the US-Iran ceasefire agreement is “now over.” This escalation has reignited concerns over energy-driven inflation, further cementing Fed rate hike expectations, thus suppressing gold’s upside momentum.
In addition, the US weekly initial jobless claims will be released during the day, and speeches by FOMC members with voting rights will offer further policy clues. However, the market’s core focus remains on developments in the Middle East.
Technical Analysis
From a technical perspective, gold maintains its recent bearish bias on the daily chart. Price trades below the 200-day simple moving average and remains within a descending parallel channel—both technical features point to a bearish structure.
In terms of indicators, MACD remains below the zero line, DIFF -75.21 crosses above DEA -92.55 to form a golden cross, and the red bars are expanding, indicating significantly weakened bearish momentum; RSI has rebounded from the oversold zone, with RSI1 at around 46.00, not yet in the overbought territory (70), suggesting there is still room for short-term correction.
Further above, the 200-day simple moving average ($4,489.53/oz) constitutes a stronger resistance. This means that even if gold prices break out above the descending channel, further upside will still be limited by this moving average resistance.
On the downside, initial support can be found near the overnight low at 4,020 and the psychological 4,000 mark, while recent lows around 3,943 also provide support. The medium-term target refers to the lower edge of the descending channel near $3,812/oz. If the current corrective decline persists, this level will be a key zone for bulls to defend the broader uptrend.
(Spot gold daily chart, source: Yihuitong)
Outlook: Gold Price Rebound May Face Selling Pressure, Awaiting New Catalysts
In summary, gold is currently in a “supported below, resisted above” pattern. The weak US dollar gives gold price a floor, but inflation worries stoked by the US-Iran conflict and Fed rate hike expectations keep the upside capped. Technically, the bearish setup under the 200-day moving average and the intact descending channel mean that any rebound attempt could meet with selling pressure.
In the short term, gold prices may continue to consolidate around current levels, awaiting new catalysts to break the balance.
As of 14:15 on July 9 (GMT+8), spot gold was quoted at $4,094.95/oz.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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