Gold Price Forecast: XAU/USD Drops Below $3,320 as Ceasefire Eases Safe-Haven Demand

XAU/USD Retreats Below Key Support on Geopolitical De-Escalation

Gold price (XAU/USD) plunged more than 1% on Tuesday to trade around $3,320, extending losses below the 20-day Exponential Moving Average (EMA). The selloff follows the announcement of a ceasefire agreement between Iran and Israel, significantly reducing global risk sentiment and undermining safe-haven flows into gold.

Israel-Iran Ceasefire Erodes Safe-Haven Demand

In a major geopolitical development, U.S. President Donald Trump confirmed that both Iran and Israel have agreed to halt hostilities, putting an end to a 12-day air war. "The ceasefire is now in effect. Don't destroy it!" Trump wrote on Truth.Social.

Israeli Prime Minister Benjamin Netanyahu also confirmed the ceasefire but warned of strong retaliation if Iran violates the truce, underscoring lingering regional tensions.

Fed Bowman Adds Pressure with Dovish Rate Cut Signals

Adding further downward pressure on gold, Federal Reserve Governor Michelle Bowman voiced concerns over the labor market, suggesting the possibility of a rate cut as early as July. This has amplified expectations of looser monetary policy, leading to a broad selloff in the US Dollar.

“A July rate cut may be appropriate if labor risks materialize,” Bowman said in a speech late Monday.

This dovish shift typically benefits non-yielding assets like gold; however, in today’s session, reduced geopolitical risk is overpowering the USD weakness, pulling gold lower.

Technical Outlook: Key Support and Resistance Levels

• Immediate Support: $3,300 (psychological & technical)
• Resistance: 20-day EMA at ~$3,340
• Next Bullish Target (if recovered): $3,375
• Next Bearish Target: $3,280

Despite the current drop, the medium-term outlook for gold remains cautiously bullish if it can reclaim its 20-day EMA in the coming sessions.

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