XAU/USD declines during Asian trading as the USD rebounds amid Fed rate hike expectations and geopolitical tensions.
Gold prices retreated in early Asian trade Friday, failing to extend gains after the US Dollar recovered from a one-week low. The move follows Wednesday’s FOMC minutes, which showed policymakers split on rate direction but signaled potential further tightening due to persistent inflation risks.
Markets are pricing in an 85% chance of at least one Fed rate hike by year-end, according to the CME Group’s FedWatch Tool. The minutes also revealed that many officials expect the federal funds rate to remain near current levels, though some policy firming may still be needed.
Geopolitical risks, including US airstrikes on Iranian military targets, added to market uncertainty, pressuring gold as investors weighed inflation and global rate outlooks.