On Wednesday, June 25th, we noted that the Federal Reserve's hawkish pivot had significantly heightened market expectations for a rate hike this year, bolstering the US dollar's continuous advance to fresh one-year highs and directly pressuring gold prices. Additionally, short-term technical indicators pointed to risks of further downside for gold. Consequently, we advised monitoring resistance levels at $4145 and $4170, and support at $4090. A break below $4090 would increase near-term downside risks, with the $4000 level warranting continued attention.

Subsequent price action on Wednesday saw gold open in the Asian session with a minor bounce to $4111 before encountering resistance. It then breached the $4100 psychological level, declining to $4068 where it found initial support. A rebound attempt to $4102 failed, leading to further choppy declines to $4050. The European session opened with a bounce to $4097 before renewed selling pressure emerged. After the US market opened, gold extended its drop to $3964, rebounded to $4041, and ultimately printed a daily low of $3959. It is currently trading around $4003. Overall, gold's rallies were weak, and the short-term downtrend persisted, largely aligning with our bearish outlook.

A Wolfinance star analyst highlighted that gold has faced sustained pressure over the past month, shedding over 10% of its value, with the Fed's hawkish turn being the primary catalyst. Specifically, on June 17th, while the Fed held rates steady, it sent a clear hawkish signal. This policy pivot exceeded market expectations, with the dot plot shifting from projecting one rate cut this year to now forecasting one rate hike. This move completely overturned prior market expectations for easing, firmly anchoring policy focus on combating inflation. The resultant surge in Fed rate hike expectations has fueled the dollar's relentless rally to its highest level since April of last year, directly weighing on gold. Consequently, gold has tumbled from the one-week high seen on June 17th to recent six-month lows.

Technical Perspective on the Daily Chart

On the daily chart, following last week's failed rally, gold has continued its decline this week, hitting a fresh six-month low, indicating pronounced short-term weakness. Key resistance can be observed near the 5-day moving average around $4020. Recent price action shows gold consistently pressured and trending lower along this MA, which also aligns with the mid-June six-month low. Further resistance is noted at Wednesday's US session rebound high of $4042. For support, the Wednesday low of $3959, near the lower Bollinger Band, is key. Continued pressure could see a test of the $3900 psychological level. The bearish cross on the 5-day MA and MACD indicator, coupled with bearish crosses on the KD and RSI indicators, suggests short-term technicals point to risks of further declines.

Intraday Gold Outlook

Expectations for Fed rate hikes have intensified significantly, propelling the dollar to new annual highs and directly pressuring gold prices. A trading range approach is advised. Monitor resistance at $4020 and $4042, and support at $3959 and $3900.