The market mood has soured significantly following the June 17 Federal Reserve meeting. Traders are moving away from expectations of sustained rate relief toward active hike-risk positioning. The FOMC’s updated projections now forecast a median year-end 2026 policy rate of 3.8%, alongside a rise in PCE inflation expectations to 3.6%. With the dollar index hovering near a 52-week high of 101.71, gold has shed more than 4% since the central bank’s policy shift.

Geopolitical tensions in the Strait of Hormuz, previously a reliable catalyst for haven demand, have failed to provide a floor for prices. As tanker traffic stabilizes and oil benchmarks like WTI and Brent soften, gold is increasingly trading as a pure play on interest rates and currency strength. David Morrison, senior market analyst at Trade Nation, notes that the $4,100 level has transitioned from support to firm resistance. He warns that failing to hold the current shelf at $4,020 to $4,030 could trigger a broader stop-driven liquidation. Silver faces a similar trajectory, trading at its lowest point since December as it tests support near $58.50.