Image Credit: BBC

Gold Price Slides to One-Week Low on Dollar Strength

Gold prices edged lower on Thursday, retreating to their weakest level in a week as renewed strength in the U.S. dollar dampened demand for the safe-haven metal. The decline pushed bullion closer to key trend-channel support, raising concerns of a potential technical breakdown if dollar momentum persists.

Spot gold fell 0.8% to trade around $2,318 per ounce, while U.S. gold futures slipped to $2,323. The move comes as the U.S. Dollar Index climbed to its highest level in nearly a month, buoyed by hawkish signals from Federal Reserve officials and broader risk aversion in global markets. FXSTREET

Fed Outlook and Dollar Rally Pressure Bullion

Investors are closely monitoring the Fed’s tone after recent comments from policymakers suggested interest rates could remain elevated for longer than previously expected. Persistent inflation concerns and cautious economic optimism have limited the chances of a rate cut in the near term, bolstering the greenback and placing pressure on non-yielding assets like gold.

A stronger dollar makes gold more expensive for holders of other currencies, typically leading to softer demand. The rise in U.S. Treasury yields has also reduced the appeal of gold as an inflation hedge, pushing some investors toward income-generating assets instead. Business Today

"Gold is currently caught between safe-haven interest from geopolitical tension and the drag from a firm dollar and rising yields," noted one analyst. "The balance could shift sharply depending on upcoming inflation data and central bank commentary."

Technical Analysis: Support in Focus

On the charts, gold is flirting with trend-channel support near the $2,310–$2,315 zone. This level has held on multiple occasions over the past month and is viewed as a key short-term floor for bullish traders. A decisive break below could open the door toward the $2,280 area, a next-level support from early June.

Despite the pullback, the broader uptrend remains intact, with the metal still trading well above its 100-day moving average. However, momentum indicators are weakening, suggesting bulls may need fresh catalysts to reignite upward pressure. The Indian Express

Outlook: Cautious Sentiment Ahead of Key Data

Traders are expected to remain cautious in the short term, with eyes on upcoming U.S. macroeconomic data, including inflation prints and jobless claims. Any indication that the Fed might alter its policy path could quickly shift sentiment and trigger volatility in gold markets.

Until then, gold’s direction will likely hinge on the interplay between the dollar, bond yields, and lingering geopolitical tensions—a mix that continues to keep markets on edge.

 

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