Gold (XAU/USD) continues to remain under selling pressure for the second day in a row, declining toward the round level of $4600 and already moving below the $4650 support level. As the US dollar recovers amid uncertainty surrounding the second round of peace negotiations between the United States and Iran, this remains the main factor putting pressure on the precious metal.However, expectations of a less restrictive Federal Reserve monetary policy may limit gold's losses ahead of the key interest rate decision meeting.

Optimism regarding a diplomatic resolution of the conflict with Iran weakened after US President Donald Trump canceled the visit of Special Envoy Steve Witkoff and Jared Kushner to Pakistan.

Additional uncertainty comes from a new proposal sent by Iran to the United States, according to which discussions on the nuclear program are postponed until the end of military actions and the resolution of issues related to navigation in the Persian Gulf. However, according to available information, Trump was dissatisfied with this proposal, as it does not sufficiently address nuclear issues. Combined with tensions in the Strait of Hormuz, this maintains a high level of geopolitical risk and strengthens the position of the US dollar as a reserve currency, putting additional pressure on gold.

At the same time, the potential for further US dollar growth is limited by expectations of possible Federal Reserve policy easing. According to the FedWatch tool by CME Group, market participants estimate the probability of interest rate cuts by the end of the year at around 35%. This may prevent dollar buyers from taking active positions and thereby limit gold's decline ahead of the two-day FOMC meeting starting Tuesday.

The main focus should be on the post-meeting press conference, where comments from outgoing Federal Reserve Chair Jerome Powell will be important for further monetary policy guidance. In addition, any new signals related to developments in the Middle East crisis will have a significant impact on both US dollar dynamics and gold prices.

Overall, the current fundamental background favors sellers of XAU/USD and indicates the likelihood of a breakout from the short-term range formed since the beginning of the month. According to currency performance data, the US dollar shows the strongest gains against the New Zealand dollar. From a technical perspective, recent failed attempts to consolidate above the 20-day SMA strengthen the negative scenario. A confirmed break below the $4650 support level supports the downward outlook. The Relative Strength Index (RSI) remains in negative territory, indicating bearish dominance in the market. If the price fails to hold above the $4600 round level, it may accelerate the decline toward the $4500 round level. Bulls will gain an opportunity only after a break and consolidation above the 20-day SMA.