Persistent USD strength and rising Fed rate hike expectations limit gold’s rebound from a four-month low near $4,550.
Gold (XAU/USD) remains subdued below $4,550 in early European trading, failing to extend a modest recovery from its lowest level since March 30. The US Dollar (USD) continues to strengthen amid heightened geopolitical risks and inflation concerns tied to rising crude oil prices, reinforcing expectations of a more hawkish Federal Reserve stance.
The precious metal’s decline follows a brief intraday rebound, with prior sessions marking its weakest performance in months. Market consensus had anticipated a tepid recovery, but persistent USD demand and elevated Treasury yields cap upside potential for non-yielding assets like gold.
Geopolitical tensions in the Middle East, including recent drone strikes and escalating rhetoric, further bolster the USD’s safe-haven appeal. Investors remain cautious as Fed policymakers signal prolonged restrictive monetary policy to combat inflation.