GOLD challenging critical support yet again as FOMC Minutes loom

• Gold is miring in seven-week troughs near $4,450 early Wednesday, looking to extend the previous sell-off.
• The US Dollar Index hits six-week highs on ongoing US-Iran woes, elevated Treasury yields and Fed rate hike bets.
• Gold eyes a sustained break below the falling wedge resistance-turned-support at $4,450 amid bearish daily RSI.

Gold is consolidating the latest leg down to seven-week lows near $4,450 early Wednesday, following a 1.85% decline seen on Tuesday. Sellers appear to take a breather ahead of the Minutes of the US Federal Reserve’s (Fed) April monetary policy meeting.

Gold traders are weighing the latest threat by United States (US) President Donald Trump to resume attacks on Iran in “two or three days” if Tehran keeps refuting the significant concessions he wants before a deal can be struck to end the Middle East war.Trump’s fresh warning comes after he called off a strike on Iran after the latter submitted a revised peace proposal, while also at the request of the US’ Gulf allies.

Against this backdrop, there seems to be no end in sight to the war, and with the effective closure of the Strait of Hormuz, Oil price extends its upward trajectory, aggravating inflation concerns and sending global bond yields through the roof.

The 30-year US Treasury bond yields surged to the highest level since July 2007, near 5.20%, while the 10-year benchmark yields rose above 4.50% key level.

Elevated US Treasury bond yields and inflation expectations have ramped up the odds for a Fed interest rate hike by December this year. The hawkish Fed expectations and rallying yields continue to act as a tailwind to the US Dollar (USD) at the expense of the non-yielding Gold.

The US-Iran geopolitical uncertainty also keeps the haven demand for the Greenback intact, exacerbating Gold’s pain. A stronger USD makes Gold more expensive for international buyers using foreign currencies.

That being said, Gold traders will continue to watch out for evolving developments in the US-Iran war before the release of the Fed Minutes due later in the North American session on Wednesday.The Minutes will be dissected to gauge the central bank’s outlook on interest rates and inflation.

Daily technical analysis

In the daily chart, XAU/USD trades at $4,454.48, maintaining a bearish near-term tone as it holds beneath a stack of key moving averages. The 21-day simple moving average (SMA) at roughly $4,628 and the 50-day SMA near $4,689 sit well above spot, reinforcing an overhanging supply zone, while the 100-day SMA around $4,793 further caps the broader upside. The Relative Strength Index (14) hovers in the mid-30s, hinting at lingering downside pressure, even as price trades modestly above the longer-term 200-day SMA, which tempers the bearish bias only slightly.

On the topside, initial resistance is seen at the 21-day SMA near $4,628, followed by the 50-day SMA around $4,689 and then the 100-day SMA close to $4,793, with the broader downward resistance trend line adding to the cap above those levels. On the downside, immediate focus is on the nearby intraday pivot around $4,454 (falling wedge resistance-turned-support), with stronger structural support emerging at the 200-day SMA near $4,364; a decisive break below this latter floor would open the door to a continuation of the prevailing downtrend.