Gold Prices Tumble as Trump Ends Iran Ceasefire Deal

Gold prices have dropped sharply, trading around $4055 per ounce, after U.S. President Donald Trump announced the end of a "ceasefire agreement" with Iran and stated that dealing with Tehran is "a waste of time." This development, the most serious breach since a temporary U.S.-Iran deal took effect on June 17, has boosted the U.S. dollar and oil prices while suppressing demand for gold.

The precious metal is currently trading nearly 28% below its all-time high of approximately $5600 reached in January. Analysts note that gold's price movement is still driven by interest rate expectations, overshadowing its traditional role as a hedge against inflation and a safe-haven asset. The current macroeconomic backdrop leaves gold vulnerable to further declines.

Key resistance levels for gold are identified at the 100-day moving average near $4128, followed by horizontal resistance at $4200 and the 200-day moving average at $4260. Stronger resistance is expected around $4400. On the downside, initial support lies near the $4000 level; a break below this could signal deeper pullbacks, while holding it might lead to consolidation below the aforementioned moving averages.

Meanwhile, West Texas Intermediate (WTI) crude oil prices have risen over 7% this week, nearing $73.50 per barrel. This oil price rebound has reignited inflation concerns. The CME FedWatch Tool indicates an increased likelihood of a U.S. Federal Reserve interest rate hike in September, rising to 68% from 58%. Rising borrowing costs typically pressure gold, as investors favor interest-bearing assets. U.S. Treasury yields remain elevated, with the benchmark 10-year yield hovering around 4.57%, near its highest level since late May. The upcoming release of the Federal Open Market Committee (FOMC) June meeting minutes is highly anticipated for insights into the Fed's next steps.