Gold has stalled as a rebounding US Dollar caps its recovery, with fresh Middle East uncertainty and weak June jobs data pulling the metal in opposite directions. Traders now watch a narrowing technical range and this week’s Fed signals for the next move.
Gold surrendered its recent momentum as a firmer US Dollar limited further gains, according to FXStreet. The dollar’s recovery followed renewed uncertainty in the Middle East, where Iran announced plans to introduce new service fees for vessels passing through the Strait of Hormuz. Iranian officials also said talks with the United States would not advance until all conditions of the existing memorandum are met.
A stronger dollar caps the rebound
That mix supported demand for the dollar and undercut the metal. A stronger dollar often limits gold’s appeal because it makes the metal more expensive for buyers using other currencies. The Japanese Yen stayed under pressure, letting the USD/JPY pair move higher and helping the dollar recover from recent weakness.
Even so, gold held its footing on Monday. It traded around $4,170, up 0.35%, extending a rebound that began after Friday’s weak jobs report, while the US Dollar Index steadied below 101 near a two-week low.
Weak jobs data reshapes rate bets
The labor market did the heavy lifting. The US economy added only 57,000 jobs in June, well below the forecast of 110,000, while the Labor Force Participation Rate fell to 61.5%, its lowest reading in more than five years. Those figures cooled expectations for another interest rate hike.
Markets repriced accordingly. CME’s FedWatch tool put the odds of a July hike at 21.9%, down from 29.9% a week earlier. Falling rate expectations tend to help gold, which pays no income.
A year-long correction as context
The pullback sits inside a broader slide. Gold has corrected by nearly 25-30% since January after more than doubling between 2022 and 2025. War in West Asia pushed oil and uncertainty higher, and countries sold gold reserves to raise cash and bought dollars, with central banks turning net sellers in March.
Dan Coatsworth of AJ Bell explained the dynamic: “Investors often sell what they can in the face of trouble.” That is why the metal has behaved as a source of cash rather than a haven this time.
From here, FXStreet notes gold is trading within a symmetrical triangle, and the rising support trendline is the key level as price pulls back from resistance. The Fed minutes land this week, with the June inflation print on July 14 shaping up as the next test.
Sources: FXStreet, BeInCrypto, NDTV Profit
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