XAU/USD falls 1.22% as the US Dollar rebounds and traders price in a 66% chance of a Fed rate increase amid inflation concerns.
Gold prices retreated to $4,0553, down 1.22% on Friday, as the US Dollar recovered from a six-week low. The rebound in the DXY index, up 0.21% to 100.20, followed suspected intervention by Tokyo to support the Japanese Yen.
The Federal Reserve’s hawkish stance, with three policymakers voting for an immediate rate hike, weighed on the non-yielding metal. US Treasury yields remained elevated, capping gold’s upside despite buyers defending the $4,000 level.
Traders now assign a 66% probability of a Fed rate increase, according to the CME FedWatch Tool. Rising energy prices and Middle East tensions have fueled inflation concerns, reinforcing expectations for tighter monetary policy.