Gold Price Plunges Amid Stronger Dollar and Reduced Safe-Haven Demand
The gold price has been under pressure in recent weeks, dropping for the third consecutive week and the fourth consecutive month. The decline is largely due to the unwinding of defensive positions and short dollar bets.
One factor contributing to this trend is the U.S.-Iran deal, which has reduced the Middle East risk premium and alleviated concerns about crude oil shortages. As a result, oil prices have fallen, putting pressure on safe-haven assets like gold.
The Federal Reserve's decision to leave interest rates unchanged but signal a possible rate hike later this year has also strengthened the US dollar, further pressuring gold prices.
Currently, momentum remains bearish for gold, with key support levels at $4,100 and $4,023. If gold breaks below these levels, it could lead to a more significant decline in price, potentially even reaching $3,500.