Gold prices are facing downward pressure, trading below $4,900 per ounce, influenced by a strengthening US Dollar and Federal Reserve caution regarding future rate cuts. Geopolitical tensions offer some support, but concerns over China’s gold consumption and potential for less dovish Fed policies are weighing on the precious metal. Market participants are closely monitoring US economic data releases and Fed commentary for further direction.
- Gold fell due to renewed selling after Fed caution on rate cuts.
- Fed Governor Lisa Cook prioritized inflation risks over a slowing labor market.
- Trump’s potential nomination of Kevin Warsh as Fed chair, initially seen as hawkish, added to rate cut uncertainty.
- US-Iran tensions linger despite planned nuclear talks.
- Gold previously surged more than 6% earlier in the week due to dip-buying.
- The US Dollar is climbing to a two-week high, limiting gold’s upside.
- China’s gold consumption in 2025 fell 3.57%.
- Analysts at UBS project gold prices could rise to $6,200 by mid-2026.
- US ISM Services PMI held steady, providing modest lift to the USD.
The information points to a complex environment for gold. While geopolitical instability traditionally supports gold as a safe-haven asset, factors such as a strong dollar, uncertainty surrounding central bank policy, and shifting consumption patterns are creating headwinds. Traders are carefully watching economic indicators and policy signals to determine the next likely move for gold prices, but these various factors create a push-pull effect.