Gold trades near $4,140, down 26% from January’s $5,598 record, as markets price roughly a 58% chance of a September Fed rate hike. ETF outflows and a fading safe-haven premium add pressure, while a weekly head-and-shoulders pattern points toward a $2,575 to $2,750 target if the neckline breaks.
Gold has dropped 26% from January’s record high of $5,598 per ounce, trading near $4,140 on Tuesday. The metal keeps sliding as rate-hike bets rebuild and demand drains out of exchange-traded funds.
Why gold keeps falling
The decline traces back to the Strait of Hormuz, which Iran has blocked since late February, pushing energy prices higher worldwide. That shock lifted US inflation to 4.2% in June, its highest in three years.
Higher inflation flipped the Federal Reserve narrative, and markets no longer expect cuts. According to CME FedWatch data, traders now price a 47.1% chance of a 25-basis-point hike in September, with another 11.1% expecting a 50-basis-point move — roughly 58% tightening odds in total. Because gold yields nothing, every rise in hike expectations lifts the cost of holding it.
The Iran conflict also strengthened the dollar, which usually moves against gold, and progress on a US-Iran peace deal keeps draining the safe-haven premium. ETF investors add further pressure: World Gold Council data shows gold ETFs lost 16 tonnes in May, with around 298 tonnes now held at a loss. Rolling 90-day flows peaked near $30 billion in late February before falling to between minus $5 billion and minus $10 billion.
Not everything points down. Central banks bought a net 244 tonnes in the first quarter, above their five-year average. Fed Chair Kevin Warsh signaled no rush to raise rates after weak June jobs data, while JPMorgan still sees $4,500 by the fourth quarter and Goldman Sachs targets $4,900 by year-end.
The head-and-shoulders risk
On the weekly chart, gold’s slide formed a head-and-shoulders pattern, with the $5,598 record as the head and shoulders near $4,500 and $4,850. The neckline rises toward $4,200, where price now trades, and a decisive weekly close below it would set a measured target between $2,575 and $2,750 — roughly 35% below current levels.
Before that, the $3,300 to $3,400 area offers support, where gold accumulated for four months in 2025. Momentum has turned too: for the first time since 2024, gold trades below its 20-week moving average, which now slopes downward.
The levels that decide July
The daily chart shows a declining channel whose midline acts as temporary support near $4,141. The $4,300 to $4,400 zone flipped from support into resistance and rejected the mid-June recovery attempt.
Two catalysts frame July: the Fed’s June minutes land this week, and a signed US-Iran deal could cut energy prices and revive rate-cut bets. That leaves two levels — a daily close above $4,400 would challenge the bearish structure, while a weekly close below the neckline would open the path toward $2,575.
Source: BeInCrypto
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