Gold Weakens Below $4,000 as Fed Hike Bets and Hormuz Risks Boost USD
Gold (XAU/USD) fell back below $4,000 during Asian trading on Friday as renewed US Dollar strength, driven by expectations of Federal Reserve rate hikes and geopolitical risks in the Hormuz Strait, weighed on the precious metal.
Gold (XAU/USD) struggled to hold onto the previous day's modest recovery and met with fresh selling pressure during the Asian session on Friday. The price slipped back below the key $4,000 level as safe-haven demand for the US Dollar strengthened.
The greenback was supported by two main factors: rising bets that the Federal Reserve will continue hiking interest rates to combat inflation, and escalating geopolitical tensions around the Strait of Hormuz. Both factors drove capital into the USD, which is typically seen as a safe haven, thereby pressuring gold prices.
Despite gold's modest bounce earlier in the week, the renewed USD bid has reversed those gains. The metal now faces the risk of further downside if USD strength persists and if no new catalysts emerge to reignite gold demand.
Source: FXStreet Forex News