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Gold (XAUUSD) has lost momentum after last week’s sharp reversal from record highs. Profit-taking, a firmer Dollar, and changing Fed expectations are driving the pullback. Kevin Warsh’s nomination as the next Fed Chair signaled a possible shift toward tighter policy. At the same time, hotter U.S. inflation data raised doubts about near-term rate cuts. Geopolitical tensions also eased, further reducing demand for safe-haven assets. These combined factors have placed gold under renewed macro pressure.
 

Gold Pressured by Hawkish Fed Outlook and Sticky Inflation Data

Gold remains under pressure, with momentum shifting lower after last week’s sharp reversal from record highs. The latest decline reflects a mix of profit-taking and improving political stability in the United States. The nomination of Kevin Warsh as the next Federal Reserve Chair helped ease concerns about the Fed’s independence. Warsh is widely seen as favoring tighter monetary policy, including balance sheet reduction. This stance reduces expectations for aggressive rate cuts and boosts the Dollar, which in turn puts pressure on gold.

At the same time, inflation data surprised to the upside. The U.S. Producer Price Index (PPI) rose 3.0% year-over-year, exceeding forecasts. On a monthly basis, PPI accelerated to 0.5%, suggesting that inflation may remain sticky. This has increased expectations that the Fed may delay the start of rate cuts, especially if core inflation remains elevated. With the Fed funds rate expected to remain unchanged until mid-year, gold’s appeal as a non-yielding asset has temporarily weakened.

Geopolitical developments have also shifted. President Trump’s recent remarks suggested a potential de-escalation with Iran. Meanwhile, Iran delivered strong warnings but refrained from direct action. These signals reduced immediate demand for safe-haven assets like gold. Although underlying risks persist, the easing of tensions prompted a wave of profit-taking in gold, adding to the recent pullback.
 

Gold Reverses after Hitting Resistance at Wedge Upper Boundary

The gold chart below shows a strong technical structure shaped by an ascending broadening wedge. This formation developed from late 2024 through 2025 as the price carved out higher highs and higher lows within widening boundaries. Recently, gold surged toward the wedge’s upper boundary, briefly topping $5,600. However, the move failed to gain traction, and the price retreated sharply.
 

(Click on image to enlarge)

Gold has come under renewed technical pressure after failing to hold above key resistance. The steep drop over the past few days pushed gold back toward the midpoint of the wedge. This reversal highlights the volatility near the upper boundary and may indicate the start of a consolidation phase. The current price action has retraced a significant portion of recent gains, testing the integrity of the broader structure. While the long-term uptrend remains intact, momentum has clearly weakened in the near term.

Currently, support lies near the lower boundary of the wedge, around the $4,000–$4,200 zone. If price stabilizes above this level, the structure may hold and provide a base for the next upward leg. However, if gold breaks below this lower support, the pattern could shift into a deeper correction. For now, the wedge continues to guide the broader trend, but the latest breakdown highlights growing uncertainty and the potential for sideways movement.
 

Gold Outlook: Policy Uncertainty and Sticky Inflation Limit Near-Term Upside

Gold remains under pressure following its historic reversal from the $5,600 peak. Macro stability, stronger inflation data, and cooling geopolitical risks have reduced immediate upside catalysts. Technically, the sharp drop from the wedge’s upper boundary signals a short-term reset. As markets await clearer Fed guidance and geopolitical direction, gold may enter a consolidation phase within its long-term structure. 

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