XAU/USD retreats as the US Dollar recovers amid geopolitical tensions and rising expectations for tighter Fed policy.
Gold (XAU/USD) extended its decline from the $4,580 resistance level, erasing most of Monday’s gains. The retreat follows a rebound in the US Dollar (USD), driven by safe-haven demand and renewed bets on a more hawkish Federal Reserve amid persistent inflation concerns.
The metal had tested $4,580 during Tuesday’s Asian session but fell as geopolitical risks, including US-Iran tensions, supported the USD. Crude oil prices also recovered modestly, stoking inflation fears and reinforcing expectations for higher US interest rates.
US military strikes in southern Iran and ongoing disputes over nuclear programs and shipping routes have dampened hopes for a near-term peace deal. The uncertainty has bolstered the USD, pressuring non-yielding assets like gold.