Forex News

• Trump allows talks, but declares the US-Iran ceasefire officially over.
• Fed minutes show inflation worries and rate-hike debate.
• CPI and Warsh testimony drive the next Gold catalyst.

Gold (XAU/USD) price retreats on Friday during the North American session, pressured by US President Donald Trump's comments allowing the resumption of US-Iran talks, but reiterating that the ceasefire is “over.” The XAU/USD pair trades at around $4,103, down 0.48%.

XAU/USD falls as renewed war risks lift yields and Dollar

The yellow metal seems poised to end the week down 0.51%, driven by the escalation of the conflict. The Greenback erased its earlier losses, as the US Dollar Index (DXY), which measures the buck’s value against six currencies, holds firm at 100.94, unchanged.

In his Truth Social account, President Trump posted, “The Islamic Republic of Iran has asked us to continue 'talks.' We have agreed to do so, but the United States has stated to them, in no uncertain terms, that the Cease Fire is OVER! Thank you for your attention to this matter. President DONALD J. TRUMP.”

After the post, US Treasury yields surged, with the 10-year T-note up 2 basis points to 4.569%, amid fears that energy prices could rise, fueling fears of higher interest rates if hostilities continued.

Money markets have priced in an 80% chance of a Federal Reserve (Fed) rate increase at the September meeting. Odds for the July 29 meeting suggest that the central bank will hold rates, with the chances for a hike being shy of 34%, according to Prime Terminal data.

The US economic docket was light this week, with the release of the FOMC's last meeting minutes, which were closely scrutinised for the absence of forward guidance. The minutes showed that officials are concerned about inflation, with a “few participants” seeing the case for a rate hike. 

On Thursday, Initial Jobless Claims fell to 215K, below estimates of 218K and the previous reading of 217K, an indication that the labor market is stable.

Now eyes turn to next week's economic docket, with investors eyeing the release of US inflation data and Federal Reserve Chair Kevin Warsh's testimony before the US Congress.

XAU/USD technical outlook: Gold remains bearish below the 200-day SMA

Gold’s downtrend remains in play, as the market structure of a successive series of lower highs and lower lows is intact. Alongside this, momentum, as measured by the Relative Strength Index (RSI), is declining and is now in bearish territory, and XAU’s spot price is below the 200-day Simple Moving Average (SMA) at $4,493.

With all three of those reasons in play, Bullion prices might continue to edge lower, so any leg-up could be an opportunity for sellers.

XAU/USD first support would be the July 8 swing low of $4,021. Beneath lies the June 30 swing low of $3,941, followed by the October 28, 2025, swing low of $3,886.

Going upwards, if Gold surpasses a downslope resistance trendline near $4,200, it opens the door for challenging the $4,300 milestone. Above this area, the next ceiling level is the 200-day Simple Moving Average (SMA) at $4,493.

MUFG’s Lloyd Chan notes Bank Negara Malaysia (BNM) kept the Overnight Policy Rate (OPR) at 2.75% and expects it to stay on hold through 2026, with domestic fundamentals described as broadly supportive. Recent Malaysian Ringgit (MYR) weakness has stayed below 4.15 against the US Dollar (USD), and Chan expects USD/MYR to trade broadly within a 4.00–4.20 range near term, while maintaining a neutral stance on Malaysian government securities.

Ringgit seen holding broad range

"In Malaysia, BNM kept the Overnight Policy Rate unchanged at 2.75% and maintained a broadly neutral policy stance."

"We expect BNM to remain on hold through the rest of 2026, as current monetary settings continue to support growth while keeping inflation manageable."

"Domestic fundamentals remain broadly supportive, underpinned by a resilient labour market, healthy investment approvals, and contained inflation at around 2%."

"On FX, recent ringgit weakness has been contained below 4.15 against the USD, helped in part by BNM's measures encouraging government-linked corporates to repatriate overseas earnings."

"We expect USD/MYR to remain broadly range-bound within 4.00-4.20 in the near term."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

Commerzbank analysts highlight that China’s June Consumer Price Index (CPI) slowed to 1.0% year-on-year while Producer Price Index (PPI) rose 4.1%, widening the PPI-CPI gap and squeezing downstream margins. The PBoC acknowledged “structural divergence” between high-tech strength and weak consumption. Despite this backdrop, USD/CNY and USD/CNH both fell, reflecting some currency strength even as domestic demand remains subdued.

China reflation momentum softens

"China's reflationary recovery lost further traction in June, with CPI rising 1.0% yoy (Bloomberg consensus: 1.1%) vs 1.2% in both April and May. The reading marks the slowest CPI print in three months and reinforces concerns that domestic demand remains structurally weak even as the broader economy stabilises."

"Core CPI, which excludes food and energy, also came in at 1.0% yoy against an expected 1.1%, signalling that underlying demand-side price pressures have yet to broaden in a meaningful way."

"The producer price index told a different story, rising 4.1% yoy in June, in line with consensus and up from 3.9% in May, sustained by elevated upstream input costs tied to metals and energy. The widening gap between factory-gate inflation and subdued consumer prices continues to compress margins for downstream producers unable to pass costs through to end consumers."

"In FX, USD/CNY fell 140 pips to 6.79 and the offshore USD-CNH fell 100 pips to 6.80 yesterday."

"Industrial profit growth also showed early signs of fatigue, with the year-on-year gain softening for the first time since November, suggesting that strong exports and price gains are no longer sufficient to offset weak domestic demand."

"The two-speed dynamic is equally visible at the sectoral level. PBoC’s quarterly monetary policy committee statement, released Wednesday, introduced new language acknowledging “structural divergence” within the economy, a characterisation the central bank had not previously used, reflecting the growing imbalance between AI-driven high-tech sector outperformance and tepid consumer spending."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)