<\/p>\n
Gold fell for a second day, extending losses to trade near $4,000 an ounce as a stronger US dollar continues to put pressure on prices.<\/p>\n
Spot gold dropped as much as 1.6% after to trade at its lowest in almost two weeks. Treasuries rallied on Tuesday and a gauge of the dollar has gained 0.8% so far this week, making bullion that\u2019s priced in the US currency more expensive for buyers in other currencies.<\/p>\n
The price of gold \u201cis increasingly recoupling with real yields,\u201d said Christopher Wong, a strategist at Oversea-Chinese Banking Corp.<\/p>\n<\/p>\n
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While gold is known as a haven investment, it often falls during big cross-market selloffs as traders sell liquid assets to raise cash. Tuesday\u2019s slump on Wall Street was prompted by concerns that the AI-driven equity rally had run too far, although prices stabilized on Wednesday.<\/p>\n
The risk-off mood heaped further pressure on gold, which is already weighed down by lingering inflation risks and the increased likelihood that central banks will keep interest rates steady or hike them. Higher borrowing costs create headwinds for gold \u2013 which doesn\u2019t pay interest \u2013 by making yield-bearing assets like Treasuries more attractive.<\/p>\n
Macquarie Group Ltd. joined a chorus of banks in paring its gold-price outlook, trimming its third- and fourth-quarter forecasts to $4,450 and $4,300 an ounce, respectively. \u201cThe apparent end to the conflict in the Middle East, combined with a more hawkish Fed, has caused prices to retreat as gold\u2019s safe haven appeal fades,\u201d analysts including Peter Taylor said in a note.<\/p>\n
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New Federal Reserve Chair Kevin Warsh set that hawkish tone at his first rate-setting meeting last week, where policymakers signaled growing support for higher borrowing costs while leaving rates unchanged. The outlook jolted investors and offset the positive impact from an interim US-Iran peace deal that\u2019s allowed commercial vessels to move in greater numbers through the Strait of Hormuz.<\/p>\n
\u201cI am inclined to think we are near peak hawkishness, but it doesn\u2019t mean we can\u2019t stay around here,\u201d Wong said. The next key inflation gauge \u2013 due Thursday \u2013 is the price index for US personal consumption expenditures, which are expected to show acceleration.<\/p>\n
Spot gold fell 1.3% to $4 062.36 an ounce at 11:05 a.m. in London. Silver dropped 1% to $60.98. Platinum and palladium also fell. The Bloomberg Dollar Spot Index rose 0.2% after gaining 0.4% in the previous session.<\/p>\n
\u00a9 2026 Bloomberg<\/p>\n
#Gold #drops #stronger #dollar #Fed #rate #outlook<\/p>\n","protected":false},"excerpt":{"rendered":"
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