XAU/USD falls to a one-week low as the USD strengthens on Fed rate hike bets and geopolitical tensions in the Middle East.
Gold prices extended their weekly decline, dropping for a fourth consecutive session to near $4,550 amid sustained US Dollar strength. The USD Index climbed to its highest level since early April, driven by stalled US-Iran peace talks and rising expectations of Federal Reserve interest rate hikes.
Hotter-than-expected US inflation data and strong retail sales figures fueled speculation of a more hawkish Fed stance. The April Consumer Price Index rose 3.8% year-over-year, reinforcing bets for tighter monetary policy and weighing on non-yielding assets like gold.
Geopolitical tensions, including Iran’s seizure of a commercial vessel near the UAE, added to the USD’s appeal as a safe-haven asset. Elevated crude oil prices also supported the greenback, further pressuring gold.