Gold Caught Between Hawkish Fed and Falling Oil Prices

Gold prices continue to face pressure from rising interest rates and falling oil prices. The Federal Reserve's decision on whether to hike or cut interest rates has been a topic of debate, with markets pricing only a 35% probability of a July rate hike.

The recent decline in oil prices has eased inflation concerns, reducing the likelihood of another round of interest-rate increases. This could create a more supportive backdrop for gold, as lower interest rates would strengthen the metal's appeal due to its non-yielding nature.

However, the current policy stance of maintaining rates unchanged appears to be the most balanced option for policymakers. They are waiting for clearer evidence that inflation is either reaccelerating or moving sustainably back toward target before making a decision.

The technical outlook for gold remains bearish, with the broader downtrend still firmly intact. The metal has been unable to sustain gains above $4,560 and has instead seen lower highs since its failure to break through this level.