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Gold (XAU/USD) is in a freefall today, slicing through the $5,000 psychological floor as the "higher-for-longer" interest rate narrative officially takes the wind out of its sails. While the Iran conflict initially propelled the metal to a historic $5,423, that speculative rally is being systematically dismantled by a resurgent U.S. Dollar and a Federal Reserve that refuses to blink on inflation. Earlier today, gold futures for April delivery opened at $5,010.60, but spot prices briefly dipped as low as $4,834, marking a fresh monthly low, following stronger-than-expected U.S. Producer Price Index (PPI) data. Can the Fed balance inflation and growth as oil prices spike? The Federal Reserve's balancing act has reached a tipping point. On one hand, the U.S. labor market is showing signs of cooling, with 92,000 jobs lost in February and unemployment ticking up to 4.4%. On the other hand, the ongoing war with Iran has sent oil prices toward $120 per barrel, creating a secondary inflation shock that the Fed cannot ignore. Investors are closely watching today’s Summary of Economic Projections (SEP). If the Fed removes its previous projection of multiple rate cuts in 2026, gold could face a deeper liquidation toward structural support levels. XAU/USD key technical levels to watch: Gold is currently trading around $4,880, hovering in an indecision zone as traders await Jerome Powell’s press conference. Support: $4,850 – $4,881 This is the immediate floor. A sustained break below this liquidity zone could accelerate losses toward the rising 100-day SMA at $4,595. Invalidation: $4,996 As long as the price stays above this on an intraday basis, the bullish hope remains. A close below it confirms the corrective extension is underway. Resistance: $5,060 Gold needs to reclaim and close a full day above this specific price to prove the short-term downtrend has officially stalled. Next Target: $5,184 If the price breaks through this ceiling after a dovish Fed tone, this is the next major zone we expect it to hit. Gold Chart today ahead of the Fed meeting. March 18 2026 . Created on Tradingview Conclusion: A macro pivot for the yellow metal Today’s price action confirms that while the Iran war provided the initial fuel for gold's run above $5,000, macroeconomic reality is now back in the driver's seat. The combination of "sticky" PPI inflation and a hawkish Fed stance is stripping away the non-yielding metal's appeal in the short term. However, the broader uptrend remains technically intact as long as the structural support at $4,595 holds. For long-term investors, this pullback may represent a healthy retracement in what remains a strong long-term cycle, with major institutions still eyeing year-end targets near $6,300. Why is gold falling if there is a war in Iran? While war usually drives safe-haven demand, the conflict has caused oil prices to spike, which increases inflation. This forces the Fed to keep interest rates higher for longer, making the U.S. Dollar more attractive than gold. What is the Fed interest rate decision today? The Fed is widely expected to keep rates steady at 3.50%–3.75%, but the market is focused on whether they signal fewer rate cuts for the rest of the year. Is gold a good buy at $4,880? Technically, gold is testing immediate support. Many analysts suggest waiting for the Fed’s post-meeting guidance to see if the $4,850 floor holds before entering new long positions.