Gold slides back to major support as oil-driven inflation fears build. These are the key levels to watch

Key takeaways

• Gold has slid back toward the major support it was holding last week, approaching its lowest level since November 2025, as renewed oil gains revive inflation fears and lift the dollar and yields.
• June CPI came in soft at 3.5% annual (headline -0.4% on the month), but the print is already backward-looking: the energy correction behind it predates the latest Middle East escalation.
• The July hike has been all but priced out, yet markets stay split on September, keeping non-yielding gold under pressure into the 28-29 July FOMC.
• Gold is testing $4,000 timeframe support with a potential bullish RSI divergence still in play. Holding here could open a move back toward $4,200, while a break lower exposes minor support at $3,700 and then major support at $3,400.

Gold has come full circle. Last week we wrote that it was holding major support even as the Middle East conflict reignited, because the safe-haven bid was flowing to the dollar and Treasuries rather than to bullion. This week that support is giving way. Gold slid back toward $4,000 into Thursday, approaching its lowest level since November 2025, as fresh US strikes on Iran and Iranian retaliation against US bases pushed Brent above $87 and revived fears that inflation stays hot for longer.

The mechanism is the one we keep coming back to, and it works against gold rather than for it. Escalation lifts oil, oil revives inflation fears, that keeps the Fed leaning hawkish, and higher real yields plus a firmer dollar raise the cost of holding an asset that pays nothing.

June CPI, released Tuesday, looked like a lifeline. Headline inflation fell 0.4% on the month, the biggest drop since April 2020, pulling the annual rate to 3.5%. But the softness came almost entirely from an energy correction that predates the latest flare-up, so the market has largely looked through it. The July hike is now all but off the table, yet traders remain split on a September move, and that unresolved question is enough to keep gold capped heading into the 28-29 July FOMC.

We now head over to the charts to see whether this major support can hold, or whether a deeper move is opening up.

Gold daily chart

On the daily chart, we are still seeing a potential bullish divergence between price and RSI, with price pressing to lower lows while RSI holds higher lows. Gold is testing timeframe support around $4,000 right now, and this is the level that matters. If it fails to hold, the next major area of support sits well below at $3,400, with minor support at $3,700 where we could potentially see a pause on the way down.

There is also a clear descending trendline in play, running from the beginning of May, that has confined price for a few months now, with resistance sitting above around $4,200. A break above this trendline could be a potential signal of a bottom forming for gold here.

Gold 4H chart

On the 4H, we have a clear local downtrend and a clearly defined descending trendline that aligns with the $4,080 area. If we can break above this trendline and reclaim $4,080, then a move up toward the $4,200 resistance zone could come into play. That scenario holds unless gold breaks below the higher timeframe key support level we are testing on the daily.

Key levels to watch

• $4,000 — daily timeframe support, testing now, the level that decides the near-term direction
• $3,700 — minor support below, a potential pause on any breakdown
• $3,400 — major support if $4,000 gives way completely
• $4,080 — 4H descending trendline, reclaim needed to open the upside
• $4,200 — resistance zone on both timeframes, and the daily trendline break that could signal a bottom forming

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