Gold Bears Dominate as Wall Street and Main Street Brace for Fed’s Hawkish Bias

Gold’s safe haven narrative is getting a stress test, and right now, the bears are winning the argument. The latest Kitco News Weekly Gold Survey makes it clear: pessimism is the order of the day on both Wall Street and Main Street. Bulls are a dwindling minority, and the gold price action is reflecting that collective shrug.

The precious metal has been battered by a resurgent dollar, a hawkish Federal Reserve, and the absence of any real panic in global risk assets. The WSJ Dollar Index rose 0.56% this week to 97.60, and gold has been unable to mount any kind of meaningful rally. The S&P 500 and Nasdaq are wobbling, but not enough to drive a stampede into gold. Instead, the yellow metal is stuck in a holding pattern, waiting for a catalyst that never seems to arrive.

The timeline is as follows: The Fed signals higher-for-longer, the dollar strengthens, and gold bulls get steamrolled. Every time gold tries to catch a bid, it runs into a wall of selling. The bears are not just in control, they’re digging in for the long haul. According to Kitco, the majority of survey respondents expect gold to move lower in the near term, with only a handful willing to stick their necks out for a bullish reversal.

This is not just about rates. It’s about sentiment. The market is tired of waiting for inflation to re-accelerate or for geopolitical risks to spiral out of control. The Iran shipping incident barely moved the needle. Even as the U.S. launched strikes in response to attacks in the Strait of Hormuz, gold’s reaction was muted. The safe haven bid is on life support.

The bigger picture is even more sobering. Gold has underperformed almost every major asset class this year. Stocks are up, the dollar is up, even oil has managed a modest rebound. Gold, meanwhile, is stuck in the mud. The technicals are ugly. The fundamentals are uninspiring. And the sentiment is downright toxic.

But here’s the twist: When everyone is on one side of the boat, the risk of a violent reversal goes up. The last time gold sentiment was this bearish, the metal staged a face-ripping rally that caught everyone off guard. The setup is there, but the catalyst is missing. Until the Fed blinks, or the dollar rolls over, gold is likely to drift lower, or at best, go nowhere fast.

Strykr Watch

Gold is hanging on to support at $2,300 like a cat on a ledge. Resistance is stacked at $2,350, with the 50-day moving average capping rallies. The RSI is languishing at 42, signaling oversold conditions but no real momentum. Volume is drying up, and open interest in gold futures is at a multi-month low. This is a market in stasis, waiting for a reason to care.

Watch the dollar. If the WSJ Dollar Index breaks above 98, gold could see another leg down to $2,250. Conversely, a surprise dovish pivot from the Fed could light a fire under gold, with upside targets at $2,400 and $2,450. But don’t hold your breath. The path of least resistance is still lower.

Options traders are betting on more downside, with put/call ratios at their highest since last fall. The skew is aggressively bearish. If you’re looking for a contrarian play, this is it, but timing is everything.

The risk is that gold becomes a widowmaker trade. If the dollar keeps climbing and the Fed stays hawkish, gold could break support and trigger a cascade of stop-loss selling. The bull case hinges on a macro shock or a sudden reversal in Fed policy, neither of which looks imminent.

The opportunity is to play the range. Short gold on rallies to $2,350, cover on dips to $2,250. For the bold, selling out-of-the-money puts could pay off if volatility spikes. But keep your stops tight. This is not a market for heroes.

Strykr Take

Gold is unloved, unwanted, and uninteresting, until it isn’t. Strykr Pulse 44/100. Threat Level 2/5. The path of least resistance is lower, but the contrarian in me is watching for a sentiment reversal. Trade the range, stay nimble, and don’t get married to your position. When gold finally moves, it will move fast.