Gold Forecast: XAU/USD’s path of least resistance remains to downside ahead of Warsh

• Gold comes under renewed selling pressure early Wednesday and gives up $4,000 yet again.
• The US Dollar stands tall on surging USD/JPY, Mideast woes and hawkish Fed bets.
• Gold remains poised to crack November 2025 lows near $3,930 amid bearish technicals.

Gold faltered in its brief recovery stint above the $4,000 mark in early Wednesday’s trading, reverting toward seven-month lows of $3,942 reached a day ago.

Despite the previous attempts to regain $4,000, Gold sellers refuse to give up amid relentless US Dollar (USD) buying across the board, making the bullion more costly to hold for foreign investors.

The Greenback continues to capitalize on the ongoing US-Iran tensions, hawkish expectations around the US Federal Reserve’s (Fed) interest rate hike prospects and the USD/JPY pair's upsurge to four-decade highs.

After the United States (US) and Iran traded strikes over the weekend over control of the Strait of Hormuz, markets remain wary amid a lack of certainty over the likely peace talks between both sides and also on the durability of the fragile ceasefire.

The latest report by the Wall Street Journal (WSJ) stated on Wednesday that US President Donald Trump has recently consulted with Defense Secretary Pete Hegseth and Joint Chiefs Chairman Gen. Dan Caine on the prospect of renewed war with Iran but has, for now, decided to prioritize diplomatic engagement.

Meanwhile, Tuesday’s strong US JOLTS Job Openings report bolstered Fed rate hike bets and US Treasury bond yields, driving the next leg up in the buck.

The CME Group’s FedWatch Tool shows markets are now pricing in roughly a 67% chance of a September rate hike, underscoring growing confidence that the Fed isn't done tightening.

Surging US Treasury bond yields widen the interest rate differential between the US and Japan, exacerbating pain for the Japanese Yen (JPY) and keeping USD/JPY at its highest level in four decades near 162.80 as of writing.

That being said, all eyes now turn to the European Central Bank's (ECB) annual forum in Sintra, Portugal, later in the day, where new Fed Chairman, Kevin Warsh, participates in a key policy panel.  His comments will be closely scrutinized to reaffirm the recent repricing by the Fed, following a surprisingly hawkish Warsh’s debut as the Fed Chair last month.

In the daily chart, XAU/USD trades at $3,978.72, extending its decline below all major moving averages and maintaining a bearish near-term bias. The 21-day simple moving average (SMA) at roughly $4,191 now acts as the nearest dynamic cap, with the 50-day SMA around $4,423 and the 200-day SMA near $4,482 reinforcing a broader overhead supply zone, while the 100-day SMA further up at about $4,653 underscores the depth of the medium-term downtrend. The Relative Strength Index (14) hovers near 33, hinting at persistent but not yet extreme oversold conditions that could slow, but not yet reverse, the current bearish pressure.

Further backing the downside, the Death Cross remains in play after the 50-day SMA closed below the 200-day SMA on a weekly closing basis last Friday.