On July 16, the price of gold (XAU) broke through the psychologically important level of $4,000. The precious metal is currently trading 28% below its all-time high of $5,598, reached in January. This is no longer a correction — it is a full-fledged bear market. On the weekly timeframe, the Gaussian channel indicator recorded a red bar for the first time since October 2023, confirming a change in the long-term trend.
Typically, geopolitical tensions push safe-haven assets higher. But now the situation has reversed. The upward trend in the oil market and investors' hawkish expectations regarding the Fed rate are putting strong pressure on quotes. US airstrikes on Iranian army facilities continue for the fourth day, and the Strait of Hormuz remains closed to commercial vessels. Over five days, oil has risen in price by more than 9%. Previously, such news would boost gold — now it does not.
Why gold has ceased to be a "safe haven"
Expensive oil amplifies inflation expectations, and accelerating inflation forces the Fed to tighten policy. According to CME FedWatch, markets are now pricing in approximately a 76% probability of a rate hike in September — a week earlier, this figure was 57%. The minutes of the June Fed meeting only added pressure: nine out of 17 participants supported at least one rate hike in 2026, and the forecast for core PCE inflation now stands at 3.3%.
The rise in real yields makes gold, which generates no interest income, less attractive as a hedge — even despite geopolitical risks. Simultaneously, the breakdown of US-Iran talks keeps tensions in fuel markets high. As long as the strait remains closed and inflation does not decline, gold risks getting stuck in this macroeconomic squeeze.
Technical picture: bearish reversal
The weekly chart shows not a temporary pullback, but a fundamental trend reversal. The price has moved below the Gaussian channel itself. Gold has lost long-term support at the 0.382 Fibonacci retracement level — that is $4,333. The old support zone between $4,300 and $4,400 now acts as resistance, confirming the deterioration of the bullish structure.
The drawdown from the peak is 28% — significantly more than the standard 20% mark for a bear market. The price is currently testing the 0.5 retracement level near $3,943. Below lies the next major support — the so-called "golden pocket" at the 0.618 level, which is $3,552. Additional downside targets include the $3,300-3,400 zone and the $2,575-2,750 range.
XAU forecast: divergence on the daily chart
The daily chart complicates the bearish scenario. On one hand, on June 26, the 50-day moving average fell below the 200-day moving average, forming a "death cross." The price is moving downward within a descending parallel channel. On the other hand, the daily RSI has shown higher lows in late June and July, while the price was making lower lows — this is a bullish divergence. It often precedes a bounce.
In the event of a bounce, a likely target would be the resistance zone of $4,300-4,400. This is approximately 7% above current levels — here, the upper boundary of the channel coincides with the declining 50-day moving average. A failure to rise would open the path to the "golden pocket" at $3,552 — a decline of another 11.4% from today's levels.
If the price manages to return above $4,300-4,400, the sell-off scenario would weaken. Otherwise, the advantage shifts to sellers — the further direction will be determined by the Fed's decision in September and the situation in the Strait of Hormuz.
My conclusion: gold is at a turning point. The bullish divergence on the daily chart offers hope for a corrective bounce, but the macroeconomic backdrop is too heavy for sustained growth. As long as inflation does not begin to slow and the Fed does not soften its rhetoric, every bounce in gold will be an opportunity to sell, not to buy.