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1. Core Market Logic of the Whole Trading Day

Global foreign exchange and precious metal markets are priced around two core variables today: the escalating geopolitical tensions between the US and Iran in the Middle East, plus the U.S. June CPI inflation data due for release tonight as well as the Federal Reserve Chair’s congressional hearing. This round of geopolitical moves breaks the historical rule of "buy gold amid turmoil". The complete transmission chain is as follows: U.S. military blockades Iranian ports → sharp surge in crude oil prices → market fears that energy costs will push U.S. inflation higher again → trading funds price in higher odds of Fed rate hikes and delay rate cut expectations → U.S. Dollar and U.S. Treasury yields climb simultaneously → pressure on non-interest-bearing gold assets, while all non-U.S. currencies weaken passively. Safe-haven buying flows that previously lifted gold during conflicts have fully vanished; gold is now purely priced based on interest rates and moves in tandem with Treasury yields, with safe-haven capital entirely flowing into U.S. Dollar assets.

2. Full Updates on Middle East Geopolitical Developments (Affecting Market Moves Throughout the Day)

On July 13 local time, U.S. Naval Maritime Command issued an official announcement that full maritime blockades and controls over all Iranian coastlines, oil terminals and ports will take effect at 20:00 GMT, equivalent to 4 a.m. Beijing time on July 15. Under the blockade rules, all vessels flying any national flag bound for Iranian ports must undergo boarding inspections by U.S. troops and pay passage fees. Neutral cargo ships only transiting the Strait of Hormuz without Iranian destinations may sail normally, and humanitarian relief vessels are exempt from inspections.

Iran’s Revolutionary Guard issued a tough retaliatory statement immediately, rejecting the U.S. unilateral blockade decree and warning it will deploy long-range missiles and maritime assault forces to target U.S. warships enforcing the blockade and related facilities of U.S. allies in the Middle East. Iran authorities also announced the interception and sinking of two foreign supertankers that ignored waterway warnings and entered controlled mine-laying zones the same day. The statement added all Middle Eastern nations cooperating with the U.S. blockade will be classified as hostile targets, leading to a sharp contraction in shipping traffic through the strait.

The Strait of Hormuz handles roughly one-third of global seaborne crude oil shipments, with most East Asian countries heavily reliant on this waterway for crude imports. Markets have fully priced in long-term risks of tight crude supply, triggering a 9.1% single-day surge in WTI crude oil prices the previous trading session, marking the largest one-day gain in nearly a month. The steep oil rally completely reversed the prior broad market consensus that inflation would keep cooling. Funds have shifted to price in a scenario of rebounding inflation, prolonged high interest rates from the Federal Reserve, which serves as the fundamental driver behind today’s stronger U.S. Dollar and pressured gold prices. Over 50,000 U.S. military personnel are currently stationed across the Middle East, and military standoffs in the region will continue to heat up, leading to expanded market volatility around the official launch of the blockade early tomorrow morning Beijing time.

3. Spot Gold Price Trends, Bull-Bear Logic and Detailed Support & Resistance Levels

3.1 Real-Time Price and Intraday Trend (Midday Asian Session, July 14)

International spot gold is currently trading near $4,003 per troy ounce, edging slightly lower by 0.07% intraday. The prior New York session saw a sharp slump of nearly 3%, with prices briefly falling below $3,992 and breaking the key short-term support at $4,050, hitting a two-week low. The mild technical recovery observed during today’s Asian session lacks strong bullish buying momentum, and the overall bearish trend remains intact. Domestic gold products weakened in tandem: Shanghai Gold Exchange AU9999 stands at 875 RMB per gram, down 1.29% intraday; the main Shanghai gold futures contract trades at 873.26 RMB per gram, with an intraday drop of 2.12%, showing synchronized bearish moves between domestic and overseas markets.

3.2 Four Core Bearish Factors Pressuring Gold in the Short Term

First, rising real U.S. Treasury yields. Driven by rebounding inflation expectations, the 10-year U.S. real Treasury yield climbed to 2.34%, its highest level since April last year. Gold generates no interest income, so climbing Treasury yields raise the opportunity cost of holding gold. Hedge funds have continuously cut long gold positions, with large-scale capital outflows from precious metal ETFs shifting toward U.S. Treasury bonds.

Second, Federal Reserve officials collectively released strongly hawkish signals. Fed Governor Waller stated publicly that if tonight’s core CPI data reveals sticky inflation higher than market forecasts, the Fed will need to resume rate hikes in the near term. He emphasized a single mild monthly inflation slowdown is insufficient to confirm inflation will return to the 2% target, requiring consecutive cooling data to reverse tightening policies. Current interest rate futures pricing puts the odds of a rate hike at the July policy meeting at 50%, with the probability of a September rate hike approaching 70%. Market pricing for two rate cuts within this year has almost entirely evaporated.

Third, the stronger U.S. Dollar weighs on dollar-denominated gold. The U.S. Dollar Index has stabilized above 101 to form a bullish trend, passively pressuring all global commodities and precious metals. Without a reversal in the Dollar’s bullish structure, gold’s rebound potential will remain capped.

Fourth, diversion of traditional safe-haven capital. During this round of geopolitical crisis, global risk-averse funds prioritize U.S. Dollar cash, Treasury bonds and crude oil assets. Gold’s function as a safe-haven hedge has completely failed, stripping it of independent upside momentum and leaving it to move passively with interest rates.

3.3 Structural Bullish Fundamentals Supporting Gold Over the Long Term (Limiting Deep Downside)

First, persistent strategic gold purchases by global central banks remain unchanged. Central banks worldwide recorded net gold purchases of 243.7 tonnes in Q1 2026, with the People’s Bank of China increasing its gold reserves for 19 consecutive months. Monthly net gold imports into China rose sharply month-on-month. World Gold Council surveys show nearly 90% of central banks plan to raise gold reserve ratios over the next 12 months. Central bank buying is a long-term allocation behavior that will not pause amid short-term price swings, providing a long-term floor for gold prices.

Second, the global de-dollarization trend continues, while the U.S. Dollar’s share of global foreign exchange reserves keeps declining. Multiple nations have adjusted their reserve structures to reduce holdings of U.S. Dollars and Treasury bonds while boosting physical gold reserves, granting gold long-term allocation value at the global monetary system level.

Third, heavy physical bargain-hunting buying emerges near the $4,000 psychological threshold. The $4,000 level is widely recognized as a key long-term support zone; every time gold prices touch this level, physical gold buyers from Asia and institutional investors building positions on dips step into the market. As such, gold prices will struggle to sustain a break below $4,000 in the short run, likely oscillating at lower levels pending data guidance.

3.4 Key Gold Price Zones

Primary short-term support ranges from $3,990 to $4,000, where short-term bargain-hunting capital and concentrated historical trading positions accumulate. If tonight’s CPI data meets market expectations, gold will likely oscillate within this band. Strong secondary support sits at $3,950; gold will only test this level if inflation data far exceeds forecasts and Fed rate hike expectations surge. Short-term resistance falls between $4,040 and $4,070, a former support zone now converted into strong resistance. Gold will only have momentum to break this band and rebound if inflation data comes in significantly below forecasts and the U.S. Dollar slides rapidly. Major overhead resistance stands at $4,100; gold must hold above this level to return to its prior upward oscillation channel.

4. Complete Trend Analysis and Driving Factors for Major Forex Currencies

The U.S. Dollar Index traded sideways with mild consolidation during the Asian session near 101.20. After two consecutive days of sharp rallies, bulls took minor profit-taking, yet the overall uptrend remains unbroken. Supported by inflation expectations tied to geopolitics, the Dollar maintains a clear bullish bias, pressuring all G10 non-U.S. currencies simultaneously. Divergence between currencies stems mainly from gaps in domestic economic fundamentals and monetary policy differentials versus the U.S.

EUR/USD

Currently quoted at 1.1383, the pair edged lower intraday. Core bearish pressure stems from widening monetary policy divergence between the U.S. and Eurozone. Rebounding U.S. inflation reinforces Fed tightening expectations, while Eurozone manufacturing and domestic demand data remain weak with feeble economic recovery momentum. Markets continuously price in early rate cuts from the European Central Bank, widening interest rate differentials between the two regions and pressuring the Euro. No positive domestic economic data can offset the strong U.S. Dollar, leaving the Euro with no conditions for a stabilizing rebound and sustaining a weak downtrend.

GBP/USD

Priced at 1.3360, the Pound continued its mild decline. UK inflation data has cooled consistently in recent months, easing domestic inflation pressures, leading markets to price in rate cuts from the Bank of England in the second half of the year. Compared with the Fed’s current hawkish stance, widening UK-U.S. interest rate expectations, paired with weak UK economic recovery and soft consumption data, push the Pound lower alongside other non-U.S. currencies with minimal rebound momentum.

USD/JPY

Quoted at 162.36, the pair hit new stage highs once more. Divergent U.S.-Japan monetary policies act as the core driver: climbing U.S. Treasury yields and rising rate hike expectations contrast with the Bank of Japan’s persistent ultra-loose policy with no tightening plans, expanding long-term interest rate gaps between the two nations. As a low-yield funding currency, the Yen continues depreciating amid rising U.S. yields, with no conditions for a full trend reversal in the short term, only minor technical pullbacks.

AUD/USD

Priced at 0.6912, the Australian Dollar posted relatively larger intraday losses among major non-U.S. currencies. As a commodity-linked currency, the AUD faces triple headwinds: broad weak sentiment across global commodities, cautious market sentiment over domestic demand recovery, and sustained U.S. Dollar strength, locking it into a weak trend with no near-term rebound catalysts.

USD/CHF

Trading at 0.8141, the pair maintained its upward trajectory. The traditional safe-haven Swiss Franc failed to attract risk-averse capital amid Middle East tensions, as safe-haven funds fully flowed into the U.S. Dollar. Paired with rising U.S. yields and a lack of positive fundamental catalysts for the Franc, it weakened alongside other non-U.S. currencies, lifting USD/CHF higher.

CAD

The Canadian Dollar outperformed other non-U.S. currencies with flat intraday performance, supported by surging crude oil prices as Canada is a major oil exporter. Still, it cannot fully resist the U.S. Dollar’s bullish momentum, only posting far milder losses than the Euro, Yen and Australian Dollar.

5. Federal Reserve Policy and Full Market Interest Rate Pricing

Internal divisions within the Federal Reserve persist, with the overall policy stance tilted hawkish. Core official Waller issued clear rate hike signals, identifying tonight’s core CPI print as the critical benchmark for policy adjustments. Federal Reserve Chair Walsh will attend a congressional hearing at 10 p.m. Beijing time, with markets closely watching his full statements on inflation, interest rate paths and monetary policy adjustments for the second half of the year. Hawkish testimony will extend the current bullish U.S. Dollar and bearish gold trends; remarks signaling caution and delayed rate hikes will ease volatility and trigger short-term rebounds for precious metals and non-U.S. currencies.

A clear reversal has taken place in market interest rate pricing, with prior forecasts of two rate cuts within the year nearly erased. Holding interest rates steady remains the baseline scenario for the July FOMC meeting, yet the odds of a rate hike climbed to 50%. The probability of a 25-basis-point rate hike in September stands at 51.3%, plus a 16.9% chance of a 50-basis-point hike, bringing total bets on a September hike close to 70%. The Fed’s core policy anchor remains inflation data; even mild softness in employment figures will not trigger rate cuts until inflation falls back to the 2% target, with "higher rates for longer" now the consensus market pricing theme.

6. Full Scenario Analysis for Tonight’s Two Critical Events (Market Turning Point of the Week)

Event 1: U.S. June CPI Inflation Data, 8:30 p.m. Beijing Time

Market consensus forecasts headline U.S. June CPI at 3.8% year-on-year, down from the prior reading of 4.2%, with a month-on-month decline of 0.1%. Core CPI is projected to edge down to 2.8% year-on-year from 2.9% previously, with a 0.2% month-on-month gain. Core CPI is the Fed’s primary monitoring indicator, directly determining market interest rate expectations.

Scenario One: Both headline and core CPI print above forecasts. Sticky inflation is confirmed, markets sharply raise September rate hike odds, the U.S. Dollar Index surges above 101.8, 10-year U.S. Treasury yields climb further, gold tests support between $3,980 and $3,950, while the Euro, Yen, Australian Dollar and other non-U.S. currencies accelerate depreciation.

Scenario Two: CPI data fully matches market forecasts. Current market logic holds steady, the U.S. Dollar trades sideways, gold oscillates widely between $3,990 and $4,040, and non-U.S. currencies consolidate with ongoing weakness pending further guidance from the congressional hearing testimony.

Scenario Three: Both headline and core CPI fall below forecasts. Fears of rebounding inflation ease sharply, markets scale back rate hike bets and revive rate cut expectations, the U.S. Dollar slides rapidly, Treasury yields decline, gold rallies to test resistance at $4,070 to $4,100, and the Euro, Pound and Australian Dollar see staged corrective gains.

Event 2: Federal Reserve Chair Walsh Congressional Hearing Testimony, 10 p.m. Beijing Time

Markets will focus on three core segments of the testimony: assessments of current inflation rebound risks, conditions for interest rate adjustments in the second half of the year, and policy responses to oil price hikes transmitting into domestic inflation. Hawkish testimony will sustain the current bullish Dollar and bearish gold trend; remarks signaling a wait-and-see stance and delayed rate hikes will offset volatility sparked by CPI data and trigger short-term rebounds for precious metals and non-U.S. currencies.

Additionally, the full launch of the U.S. maritime blockade against Iran occurs at 4 a.m. tomorrow Beijing time, requiring real-time tracking of Strait of Hormuz shipping conditions and Iranian retaliatory moves. News of large-scale tanker attacks or full waterway closures will spark another crude oil rally, reigniting inflation expectations to indirectly boost the U.S. Dollar and pressure gold.

7. Important Domestic Regulatory Notice

Eight Chinese government departments jointly launched a two-year special crackdown on illegal off-exchange financial transactions, explicitly banning overseas London gold, COMEX gold futures, forex margin trading and CFD contract transactions. All related activities within mainland China including platform agency work, client lead generation, online and offline trading signal sharing, and fund transfer coordination count as illegal financial operations, with criminal liability for cases involving large transaction volumes. Regulators only allow existing clients to close positions and withdraw funds, fully prohibiting new position openings and additional deposits. All overseas off-exchange trading platforms lack regulatory oversight in China, offering zero protection for capital security and carrying extreme risks of principal losses and legal penalties.

8. Summary of Market Observation Rhythm Going Forward

Before tonight’s CPI data and Fed congressional hearing release, market volatility will remain muted, with the U.S. Dollar oscillating at highs, gold seeing mild corrective bounces at lower levels, and all non-U.S. currencies stuck in weak consolidation. A one-sided directional market move will emerge after data prints tonight, with gold’s intraday volatility likely ranging from 30 to 80 U.S. Dollars and sharply expanded trading ranges for major forex pairs. Over the medium to long term, short-term interest rate pressure cannot override the underlying bullish support from persistent central bank gold purchases, creating allocation opportunities after sharp gold pullbacks. The U.S. Dollar maintains a clear short-term bullish trend; only sustained, sharp cooling in U.S. inflation data can fully reverse its current strength. Middle East geopolitical tensions will generate periodic market disruptions, with every escalation indirectly pressuring gold through the oil-inflation transmission channel, preventing independent safe-haven rallies in the short run.