Harmovest Capital | Will Dollar Strength Continue to Pressure Gold Prices?

09/06/2026 | Market Focus

Key Highlights

• Safe-haven demand has shown signs of increasing.

• The U.S. Dollar remains in a strong upward trend.

• Gold is facing short-term downside risks.

Market Recap

Trump Seeks to Prevent Further Escalation Between Israel and Iran

Geopolitical tensions in the Middle East remain a major focus for global financial markets.

According to reports, U.S. President Donald Trump has been actively engaging with Israeli Prime Minister Benjamin Netanyahu in an effort to prevent the conflict between Israel and Iran from escalating further. Following multiple waves of missile attacks and retaliatory actions, Trump reportedly urged Israel to exercise restraint and avoid actions that could trigger a broader regional conflict.

The U.S. administration has been attempting to preserve diplomatic channels with Iran and avoid disruptions to ongoing peace negotiations. However, Israel continues to prioritize its national security objectives, creating challenges for Washingtons diplomatic efforts.

After several rounds of military exchanges, Netanyahu publicly stated that Israel would refrain from further strikes unless Iran launches additional attacks. Nevertheless, ongoing tensions between Israel, Iran, and regional proxy groups continue to create uncertainty across global markets.

Analysts believe that differences between the United States and Israel regarding regional security strategies have complicated peace efforts while providing Iran with greater room to strengthen its regional influence.

As a result, geopolitical developments remain a key driver of market sentiment, particularly for the U.S. Dollar, Gold, and major equity indices.

Affected Financial Instruments

• U.S. Dollar Index (DXY)

• Gold (XAUUSD)

• S&P 500 Index

Market Summary

Despite ongoing diplomatic efforts, uncertainty surrounding U.S.-Iran relations and Middle East tensions continues to support demand for safe-haven assets.

The U.S. Dollar remains resilient as investors seek safety amid geopolitical risks. However, Gold has struggled to benefit from the same environment due to persistent Dollar strength and improving risk appetite in broader financial markets.

Current Market Bias

✅ Bullish U.S. Dollar

⚠️ Bearish Gold (Short-Term)

⚠️ Increased Volatility in Equity Markets

Today's Key Economic Event

U.S. Existing Home Sales Data

Market participants will closely monitor the release of U.S. housing market data today.

Recent economic indicators suggest that consumer spending has begun to moderate, while elevated inflation and higher interest rates continue to pressure housing demand. As a result, the market expects home sales figures to come in weaker than forecast.

A softer-than-expected reading could reinforce concerns about slowing economic growth and influence the outlook for the U.S. Dollar, precious metals, and equity markets.

Financial Instruments Impacted

• U.S. Dollar Index (DXY)

• Precious Metals (Gold, Silver, Platinum)

• U.S. Equity Indices

Trading Outlook

Preferred Strategy

Sell Gold on Rally (XAUUSD)

Current fundamental and technical conditions suggest that Gold may remain under pressure in the near term. Traders may consider looking for selling opportunities during corrective rebounds while maintaining proper risk management.

Market Sentiment Analysis

Fear & Greed Index

The Fear & Greed Index is a widely followed indicator that measures investor sentiment and reflects whether markets are being driven primarily by fear or greed.

Latest Reading:

54 (Greed / Risk-On Sentiment)

Previous Reading:

36 (Fear)

The significant increase in the index suggests that market participants are becoming more comfortable with risk exposure and that safe-haven demand is gradually easing.

As geopolitical concerns are increasingly priced into the market, capital flows have started shifting back toward risk assets such as equities and cryptocurrencies.

Technical Analysis

XAUUSD (Gold)

Gold continues to show signs of technical weakness.

Key Technical Observations

• Price has broken below both the EMA89 and EMA144 support levels.

• A bearish "N-shaped" continuation pattern has formed.

• Downtrend structure remains intact.

• Buying momentum remains limited.

Technical Outlook

As long as Gold remains below the EMA89 and EMA144 resistance zone, the overall trend is expected to remain bearish.

The current price structure suggests that further downside movement cannot be ruled out, with sellers continuing to dominate the market.

Trading Strategy

• Primary Bias: Bearish

• Preferred Setup: Sell on rallies

• Risk Management: Maintain disciplined stop-loss placement