Gold prices stay near a two-week low as the US dollar maintains modest strength.

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Gold Prices Slide to Two-Week Low Amid Fed’s Hawkish Stance and Stronger USD

Gold price (XAU/USD) extends its decline for the second consecutive day, slipping to a two-week low around the $2,860 region during the Asian session on Friday. The decline comes as the US Dollar (USD) strengthens, supported by expectations that the Federal Reserve (Fed) will maintain its hawkish stance due to persistent inflationary pressures. This renewed USD strength is driving investors away from non-yielding assets like gold.

Key Factors Driving Gold’s Decline

Stronger US Dollar: The USD continues its recovery from its lowest level since December 10, weighing on gold prices.

Fed’s Interest Rate Outlook: Market expectations suggest the Fed may keep rates elevated for longer, reducing gold’s appeal.

Pre-US Inflation Data Repositioning: Traders are adjusting positions ahead of the crucial US inflation data release, which could shape the Fed’s next move.

Safe-Haven Demand: While gold remains under pressure, geopolitical uncertainty, including concerns over US President Donald Trump’s tariff policies, may offer some support.

Bond Yield Movement: A potential decline in US Treasury bond yields could help limit further losses for gold.

Gold Price Outlook: What’s Next?

Investors are closely watching the upcoming US inflation data, which could provide fresh cues on the Fed’s future policy decisions and set the near-term direction for gold prices. Additionally, global economic uncertainties and risk sentiment shifts may play a role in shaping XAU/USD movements in the coming days.