Gold Slides Below $4,050 as Inflation Fears Lift Fed Hike Bets and USD
Gold prices continue to slide on Friday, falling below $4,050 as investors remain concerned about inflationary pressure and its impact on interest rates. The US Federal Reserve's (Fed) potential for a higher-for-longer interest rate hike is bolstering the US Dollar (USD), which has reached a nearly one-month high.
The latest escalation in US-Iran tensions has fueled oil prices, which are now at their highest since June 11. This has heightened concerns about supply disruptions and inflationary pressure, leading investors to seek safe-haven assets like the USD.
US President Donald Trump's imposition of tariffs on 60 key trading partners, covering 99.4% of US imports, is also weighing on riskier assets and benefiting the Greenback. The Fed's next meeting is expected to be a closely watched event, with investors looking for cues on interest rate policy.
From a technical perspective, gold's failure near the 200-period Exponential Moving Average (EMA) and the subsequent fall suggest that its recent bounce from $3,960-$3,959 has run out of steam. The Moving Average Convergence Divergence (MACD) indicator is in negative territory, while the Relative Strength Index (RSI) sits at 41, hinting at downside momentum.