XAU/USD falls for a second day as safe-haven demand wanes amid receding Fed rate hike expectations and easing geopolitical risks.
Gold (XAU/USD) extended its pullback from a two-month high near $4,450, dropping to a fresh weekly low close to $4,300 during Asian trading on Friday. The decline marks a second consecutive day of losses as receding US Federal Reserve rate hike bets reduce pressure on the USD, while easing geopolitical tensions in the Middle East diminish safe-haven demand for the precious metal.
The commodity had previously rallied to its highest level since June 5, supported by persistent geopolitical uncertainties. However, recent statements from US and Iranian officials suggest a potential de-escalation, though tensions remain elevated over the Strait of Hormuz and Red Sea attacks. Crude oil prices, meanwhile, remain subdued despite the risks.
Market focus now shifts to Fed policy expectations, with traders assessing the likelihood of rate cuts later this year. The USD’s strength continues to weigh on gold, offsetting residual geopolitical premiums.