Dollar Surge Caps Gold at $4,300 Amid Fed Hawkish Pivot
Gold prices have stabilized near $4,300 as the US Dollar Index (DXY) surges to its highest level since July 30. The Federal Reserve's decision to raise rates and project one more increase this year has put downward pressure on gold.
The Fed's hawkish pivot, combined with sustained demand for the dollar, has pushed gold prices below their recent highs. The CME Group's FedWatch Tool shows a massive 90% probability of another rate hike in December, which is likely to continue supporting the dollar and weighing on non-yielding assets like bullion.
Geopolitical tensions involving Iran are also contributing to the dollar's strength, with Donald Trump telling the UN General Assembly that he faces a 'big decision' on Iran. The US has imposed fresh sanctions targeting Iranian aviation, and Tehran is reiterating conditions for reopening the Strait of Hormuz.