Dollar Rally Pauses, Gold Prices Lag Near Weekly Lows Amid Hawkish Fed Tone
Gold prices remain subdued near weekly lows as the US Dollar consolidates its recent gains. The metal is currently trading below $4,300 after a strong advance by the Greenback.
The Federal Reserve's hawkish stance and rising US Treasury yields continue to exert downward pressure on gold. Fed officials have signaled their willingness to maintain or extend restrictive policy, citing rising inflation risks and a solid economic backdrop.
Recent comments from Fed Governor Michael Barr and New York Fed President John Williams emphasized the central bank's focus on bringing inflation under control. Barr stated that rising inflation risks imply the US central bank is likely to raise rates again, while Williams noted that another rate increase this year would be 'reasonable'.
The technical backdrop for gold remains negative, with key Fibonacci and moving average resistance levels capping the upside. The unresolved nature of the US-Iran conflict also supports demand for the safe-haven Dollar, limiting potential gains for gold.