Gold Rally Loses Momentum as Rate Hike Fears and Strong Dollar Pressure Prices

Gold’s record-breaking rally has lost steam as growing expectations of higher U.S. interest rates and a stronger dollar weigh on investor sentiment. After reaching an all-time high of $5,595 per ounce in January, gold prices have fallen about 25%, touching a six-month low near $4,022 this week. Analysts say rising oil prices linked to the Iran conflict have boosted inflation concerns and increased the likelihood of Federal Reserve rate hikes, reducing gold’s appeal.

Market sentiment has also been hurt by a key technical signal, with gold falling below its 200-day moving average for the first time in over two years. Investors have become more cautious following strong U.S. economic data, while gold-backed exchange-traded funds have seen continued outflows. Analysts note that additional bearish positions could emerge if prices remain under pressure.

Despite the recent decline, experts believe gold’s long-term outlook remains supported by factors such as central bank buying, geopolitical tensions and growing fiscal deficits. However, weak physical demand, particularly in India, and uncertainty over interest rates are expected to keep prices rangebound in the coming months until stronger catalysts emerge.

Pic courtesy: google/ images are subject to copyright