XAU/USD crashes with Japanese Yen as stops likely triggered

• Gold keeps falling and refreshes seven-month lows below $3,950 early Tuesday.
• The US Dollar rebounds as USD/JPY hits fresh 40-year highs; geopolitical woes loom.
• Gold could test November 2025 lows near $3,930 as the Death Cross remains in play.

Gold is down nearly 1.50% so far in Tuesday’s Asian trading, sitting at a fresh seven-month low as the key $3,950 psychological barrier gave way amid a renewed wave of selling.

Gold’s underlying bearish momentum regained traction early Tuesday, losing roughly $75 in a matter of a couple of hours.

The sudden crash in the Japanese Yen (JPY) drove the USD/JPY pair to its highest level since 1986, above the 162.00 threshold, potentially triggering automated stop-loss orders in Gold below the $4,000 level once again.

The USD/JPY upsurge injected fresh life into the US Dollar (USD), having extended its previous week’s retreat on Monday amid expectations of a de-escalation in the renewed US-Iran tensions.

The renewed uptick in the Greenback continues to weigh on non-yielding Gold, particularly amid increased bets on the US Federal Reserve’s (Fed) interest rate hikes this year.

Markets project three Fed rate hikes this year and are currently pricing in about a 63% chance of a September lift-off, according to the CME Group’s FedWatch Tool.

In addition, Gold traders remain on edge ahead of the expected US-Iran negotiations in Doha on Tuesday, even as Iran said on Monday that no meeting had been scheduled.

Over the weekend, missiles fired from both sides challenged the interim ceasefire to end the four-month-old war.

Looking ahead, the USD/JPY pair-driven USD price action will continue to influence Gold dynamics as traders await the US JOLTS Job Openings data and fresh US-Iran headlines.

Further on Wednesday, the European Central Bank's (ECB) annual forum in Sintra, Portugal, will be closely watched when the new Fed Chairman, Kevin Warsh, participates in a key policy panel.  This follows a surprisingly hawkish debut from Warsh as the Fed Chair earlier in the month.

In the daily chart, XAU/USD trades at $3,962.98. The metal remains under clear bearish pressure, sitting below the 21-day simple moving average (SMA) at $4,213.52 as well as the 50-day, 100-day and 200-day SMAs clustered between roughly $4,440 and $4,660, which together suggest a firmly capped medium-term trend. The Relative Strength Index (14) at 32.22 hovers just above oversold territory, hinting that downside momentum is still dominant but could be nearing exhaustion.

On the topside, initial resistance is located at the 21-day SMA at $4,213.52, ahead of the 50-day SMA at $4,437.66 and the 200-day SMA at $4,480.39, with the 100-day SMA at $4,662.90 marking a more distant barrier that reinforces the broader bearish structure. With no clear moving-average or structural supports visible below the current price in this dataset, any further decline would leave XAU/USD searching for fresh demand levels, while only a sustained recovery above the 21-day SMA would start to ease immediate selling pressure.