Gold traded in a tight band in early Europe on Tuesday, holding close to its lowest level since 23 March after the US dollar eased from an over two-month high. Iran and Israel said on Monday they had halted attacks on each other following an appeal from US President Donald Trump, a development that lent some support to bullion, although markets remained cautious as the wider Middle East situation stays unresolved. US-Iran talks remain stalled over Tehran’s nuclear programme and demands spanning sovereignty recognition, control of Strait of Hormuz maritime traffic, sanctions relief and the release of frozen assets, keeping a geopolitical risk premium in place while constrained shipping through the chokepoint has also left energy markets volatile.
Inflation concerns and expectations of more hawkish central banks, including the Federal Reserve, have kept attention on rates: the CME Group FedWatch Tool shows a more than 70% chance of a hike by year-end, which underpins US Treasury yields and limits upside for non-yielding gold. Focus now turns to US CPI on Wednesday and PPI on Thursday. Technically, gold’s close below the 200-day SMA last week reinforced bearish conditions, with support near $4,270.16; RSI sits around 35 and MACD remains negative. Resistance is seen at the 200-day SMA at $4,441.10 and then near $4,571.21.
Geopolitical Tensions and Inflation Pressure
Gold is stuck in a narrow channel, even with the US Dollar pulling back slightly from its recent highs. While the temporary halt in attacks between Iran and Israel provides some relief, we see underlying tensions keeping a floor under geopolitical risk. Data from maritime risk analysts shows that war risk insurance premiums for tankers transiting the Strait of Hormuz have increased by 15% over the past month, reflecting these unresolved issues.
The main pressure on gold comes from expectations of a more aggressive Federal Reserve. The U.S. Bureau of Labor Statistics reported last week that the May Consumer Price Index (CPI) came in slightly hot at a 3.5% annual rate, fueling these concerns. Consequently, as of this morning, June 9, 2026, the CME FedWatch Tool shows an 82% probability of a rate hike by year-end, which is keeping US Treasury yields elevated and supporting the dollar.
Trading Strategies and Technical Outlook
We believe any strength in gold should be viewed as a selling opportunity. This environment feels similar to the run-up to the 2022 rate hike cycle, where a strong dollar and rising real yields eventually outweighed safe-haven buying. For derivative traders, this means considering strategies like buying put options or establishing bear put spreads to capitalize on expected downside.
From a technical standpoint, the break below the 200-day Simple Moving Average is a significant bearish signal. We are now watching for a sustained move below the descending channel support around $4,270 before committing to more aggressive short positions. Indicators like the RSI and MACD suggest that while sellers are in control, the market isn’t deeply oversold, leaving room for a further decline.
Any surprise rally would face its first major test at the 200-day SMA, currently near $4,441. A move back above this level would be the first sign of caution for our bearish view. The more significant barrier remains the upper channel boundary around $4,571, which we expect to cap any unexpected bullish momentum.
