Dollar Surge Sinks Gold Prices Amid Inflation Fears

Gold prices took a hit as the US Dollar rose to a two-month high following last week's Federal Reserve rate hike. The Fed increased interest rates by 25 basis points, aiming to bring inflation back to its 2% target.

The strong US Dollar and elevated Treasury yields made gold vulnerable to further losses. Despite lower oil prices due to positive Middle East developments, the inflation concerns persisted, keeping US Treasury yields high.

Technical analysis suggests that gold is testing the lower Bollinger Band near $4,305, with initial resistance at $4,350. The Relative Strength Index and Average Directional Index indicate weak momentum in gold's favor.