Gold sticks to intraday losses amid receding safe-haven demand; holds above $3,400

• Gold price retreats from a nearly two-month high touched at the start of a new week.
• A positive risk tone undermines the XAU/USD, though the downside seems limited.
• Trade uncertainties, geopolitical risks, and a weaker US could support the XAU/USD.

Gold price (XAU/USD) sticks to intraday losses through the first half of the European session and now seems to have snapped a three-day winning streak to a nearly two-month peak touched earlier this Monday. A generally positive tone around the equity markets is seen undermining demand for the safe-haven bullion. However, a combination of factors holds back bearish traders from placing aggressive bets and assists the commodity to hold comfortably above the $3,400 mark.

A further escalation of geopolitical tensions in the Middle East keeps a lid on the market optimism. Furthermore, the growing acceptance that the Federal Reserve (Fed) would lower borrowing costs further in 2025 keeps the US Dollar (USD) depressed near a three-week low and contributes to limiting losses for the non-yielding Gold price. Traders also seem reluctant and opt to wait for the outcome of the highly-anticipated two-day FOMC monetary policy meeting starting on Tuesday.

Daily Digest Market Movers: Gold price bulls remain on the back foot amid positive risk tone

• Iran launched a new barrage of missiles and drones at Israel on Sunday evening, while the latter said that it began another series of strikes on military targets across Iran. Deadly strikes between Israel and Iran continued into Monday, with Israel vowing to intensify its operation against Iran.
• This comes on top of persistent uncertainty surrounding US President Donald Trump’s trade policies and lifts the safe-haven Gold price to a nearly two-month peak during the Asian session on Monday. A combination of factors, however, keeps a lid on any further gains for the commodity.
• The markets, so far, have reacted little to the heightened military conflict between Israel and Iran, which is evident from a positive tone around the Asian equities. Adding to this, a modest US Dollar uptick contributes to capping the precious metal and prompts some intraday selling.
• Any meaningful USD upside, however, seems elusive as traders might opt to wait for more cues about the Federal Reserve’s rate cut path before placing fresh directional bets. Hence, the focus remains on the crucial FOMC policy decision, scheduled to be announced on Wednesday.
• The US central bank is widely expected to keep interest rates unchanged. However, traders have been pricing in the possibility that the Fed would change its stance that interest rates will remain unchanged in the near term amid softer US inflation and signs of a cooling economy.
• The outlook will play a key role in influencing the near-term USD price dynamics and provide some meaningful impetus to the XAU/USD. In the meantime, the risk of a further escalation of geopolitical tensions in the Middle East might continue to act as a tailwind for the yellow metal.

Gold price dips below the $3,400 mark could be seen as buying opportunity amid constructive setup

From a technical perspective, Friday’s breakout through the $3,400 mark, the formation of an ascending trend channel on short-term charts, and positive oscillators on the daily chart favor the XAU/USD bulls. Hence, any further corrective slide could be seen as a buying opportunity and remain limited. Some follow-through selling below the $3,400 mark, however, should pave the way for deeper losses toward the $3,360 area, representing the lower end of the ascending channel. A convincing break below the latter would negate the constructive outlook and shift the near-term bias in favor of bearish traders.

On the flip side, momentum beyond the Asian session peak, around the $3,452-3,453 area, should allow the Gold price to aim towards challenging the all-time peak, around the $3,500 psychological mark touched in April. The said handle coincides with the top boundary of the ascending channel, which, if cleared decisively, will be seen as a fresh trigger for bullish traders and pave the way for an extension of the recent well-established uptrend.

(The title of the previous version of the story was corrected on June 16 at 07:05 GMT to say that Gold price retreats from nearly two-month top, not two-week high)