XAU/USD drops nearly 2% amid a stronger USD and rising geopolitical risks in the Middle East, pressuring the precious metal.
Gold prices (XAU/USD) fell nearly 2% to below $4,050 on Thursday, retreating from a two-day high above $4,100. The decline follows a rebound in the US Dollar (USD) as speculation grows over potential escalation in the Gulf War, with reports suggesting the White House may expand military action against Iran.
The US Dollar Index (DXY) rose 0.29% to 101.43, reducing demand for gold among foreign buyers. US economic data showed Initial Jobless Claims dropped to 187K for the week ending July 19, below forecasts of 212K, reinforcing expectations of a hawkish Federal Reserve stance on inflation. The four-week average also declined to 207.5K from 214.75K.
Rising oil prices, with West Texas Intermediate (WTI) rallying, added further pressure on gold, which typically moves inversely to the USD. Geopolitical uncertainty remains elevated after reports indicated Israel is awaiting a US decision on expanded military operations in Iran.