Gold continues to decline; after falling below $4,000, it may accelerate downward

FXStreet July 1st—— Spot gold (XAU/USD) oscillated near $3980 in early Asian trading. Diverging statements between the US and Iran regarding the Doha talks have once again cast uncertainty over the Middle East situation. Meanwhile, market attention is focused on the upcoming US ADP and non-farm payroll data to determine whether the Federal Reserve will maintain its “higher for longer” rate path. Amid the tug-of-war between safe haven demand and US dollar expectations, gold prices lack clear short-term direction.

Spot gold (XAU/USD) traded steadily during Wednesday's Asian session, with prices hovering around $3980/ozand continuing its recent sideways consolidation pattern. Market focus is on the conflicting signals released by the US and Iran regarding the Doha talks. This uncertainty keeps geopolitical risk premiums elevated but has yet to provide a new directional catalyst.

US President Trump stated that both sides would hold talks in Qatar and mentioned that Iran had “proactively requested a meeting” following recent military confrontations. However, a spokesperson for the Iranian Foreign Ministry simultaneously denied that any formal meetings were scheduled in the coming days, causing market expectations for negotiations to cool rapidly. Senior US envoys Jared Kushner and Steve Vitkoff have already arrived in Doha and will meet with Qatari officials to discuss the regional situation, but so far, no direct high-level talks between the US and Iran have been confirmed.

On the geopolitical front, the market is still weighing the possible paths between conflict and détente. If there is substantive progress in the peace process, safe haven demand may decrease, putting some pressure on gold. However, if talks stall or worsen again, concerns about energy and inflation could resurface, strengthening gold’s anti-inflation appeal. It is worth noting that in a high interest rate environment, gold’s attractiveness as a non-yielding asset is limited, making it more sensitive to changes in interest rate expectations.

On a macro level, the market is entering a key data window. The US ADP jobs report and non-farm payrolls will be released on Wednesday and Thursday, respectively, and are important for assessing the Federal Reserve's policy path. If employment data remains robust, it could reinforce expectations that the Fed will maintain higher rates for longer, strengthening the dollar and putting short-term pressure on gold. Conversely, if employment momentum weakens, it could erode dollar strength and provide support for gold prices.

From a daily chart perspective, gold remains in a high-level oscillating consolidation, with a strong support zone forming above $3950, and the short-term trend is characterized by “sideways consolidation plus momentum convergence.” Current resistance is concentrated in the range. A decisive breakout may open up room to test the $4150 area to the upside, while key support remains near . If this level is breached, short-term correction pressure will intensify significantly.

On the 4-hour chart, gold prices have repeatedly tested the $4000 round number without establishing a clear direction. The short-term moving average system is tangled together, indicating a lack of market momentum. Momentum indicators remain neutral to slightly weak, suggesting that neither bulls nor bears hold the upper hand. Ahead of the jobs data, prices are more likely to stay range-bound, awaiting macro catalysts for a directional breakout. If the ADP or non-farm data significantly diverges from expectations, it may trigger rapid moves in the dollar, leading gold prices to make a directional choice.


The current gold market is in a classic “geopolitical support vs. interest rate suppression” double-sided battle. The uncertainty around the Doha talks provides downside support, but US employment data and Federal Reserve policy expectations remain the core variables dominating medium-term trends. Unless there is a clear breakout, gold is expected to maintain its high-level consolidation structure. If future employment data significantly strengthens expectations for elevated rates, gold may face a phase of correction pressure; conversely, if economic data weakens, risk-off and rate-cut trading logic could be reignited, pushing prices back into an upward channel.