Gold Slips as Strong Dollar and Fed Uncertainty Pressure Prices
Gold prices edged lower in Asian trading on Tuesday, weighed down by a stronger U.S. dollar and ongoing uncertainty over the Federal Reserve’s next policy move following Chair Jerome Powell’s hawkish comments last week.
Spot gold fell 0.4% to $3,986.10 per ounce by 06:58 GMT, while U.S. gold futures declined 0.5% to $3,994.30. The metal has repeatedly struggled to maintain levels above the $4,000 mark, as the dollar’s continued strength makes bullion more expensive for international buyers.
Stronger Dollar and Fed Outlook Weigh on Bullion
The U.S. dollar climbed to a three-month high against major currencies on Monday, supported by fading expectations of another Federal Reserve rate cut this year. Powell recently emphasized that policymakers are not yet committed to further easing, calling a potential December rate cut “not a foregone conclusion.”
Markets have since scaled back expectations for near-term monetary easing, providing additional support to the dollar.
Adding to investor caution, Federal Reserve officials offered mixed views on Monday about the U.S. economy. Some stressed the need to stay alert on inflation, while others pointed to slowing labor-market conditions — highlighting the central bank’s divided stance.
This policy ambiguity has reinforced the dollar’s strength, pressuring gold prices further.
Gold Faces Headwinds but Downside Remains Limited
Gold, which offers no yield, tends to lose appeal when interest rates stay high or when the dollar strengthens. The prospect of fewer rate cuts and higher real yields has weakened investor demand in recent sessions.
However, analysts note that geopolitical risks and fragile U.S.-China trade relations could limit further downside for the metal. Although recent progress between Washington and Beijing briefly lifted sentiment, renewed concerns over advanced chip export restrictions have dampened optimism.
Other Metals Decline Amid Dollar Strength
Other precious and industrial metals also fell sharply under pressure from the strong greenback.
- Silver futures dropped 1.5% to $47.315 per ounce.
- Platinum futures declined 1.3% to $1,557.85 per ounce.
- On the London Metal Exchange, benchmark copper futures slipped 1.3% to $10,705.20 per ton, while U.S. copper futures fell 1.3% to $4.99 per pound.
Overall, the strong dollar and uncertain Fed trajectory continue to cast a shadow over global metal markets, keeping traders cautious ahead of key U.S. economic data releases later this week.
