The recent steady rise in the US dollar is mainly due to investors’ growing expectations that the Federal Reserve will inevitably raise interest rates this year. On the other hand, some funds are also chasing the dollar to hedge against the risks of the Iranian situation, as the ultimate goal of a comprehensive and permanent ceasefire agreement between the US and Iran remains highly uncertain. Therefore, buying the dollar to avoid the risks of the situation is also justified.

Given the outlook for interest rate hikes and the impact of geopolitical factors on the dollar, these two factors combined should dampen investors’ desire to buy gold. Gold prices are likely to be under pressure in the short term, repeatedly testing lower support levels. Unless the US dollar index reverses its rise and falls in the short term, gold prices may need to repeatedly test the support level of $4,019 before attracting buying interest.

A position can be established around $4,019, with a short-term target of $4,141 for profit-taking, and a stop-loss at $3,999.

Gold price chart (1 hour):

Ferris Kwok

Chief Analyst
Success Finance Group

Email: ferris.kwok@successfn.com