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Gold falls further as dollar firms on Fed hike bets and Iran risks

Gold extended a rejection slide after the Fed held rates steady, traders increased pricing for at least one hike this year, and renewed energy price volatility from US-Iran tensions boosted inflation concerns.

Reported · Written up by our desk · Major Pairs

Gold prices extended an intraday selloff, moving further away from the $4,100 area after the US dollar regained positive traction following Wednesday’s post-FOMC move, FXStreet said. The report framed the stronger USD as a key headwind for bullion, which does not pay interest.

FXStreet also pointed to inflation-linked concerns tied to escalating US-Iran tensions, which have kept Fed rate-hike expectations on the table. It noted that the Fed held interest rates steady at the end of a two-day meeting and refrained from a more aggressive stance, a decision that weighed on the USD and helped lift gold earlier.

The central bank decision included three dissents favoring a 25-basis-point rate hike, and traders are still pricing a higher probability that the Fed will raise borrowing costs at least once by the end of the year, according to the report. FXStreet cited TD Securities, saying precious metals have stayed weak under hawkish Fed pricing and that renewed strength in energy markets could further reinforce that pressure.

Beyond policy expectations, the report linked renewed volatility in crude to the US-Iran conflict, including tensions around shipping chokepoints such as the Strait of Hormuz and the Bab el-Mandeb. FXStreet added that the US launched strikes against Iran after surprise Iranian missile attacks on American forces, and it cited reports that Yemen’s Houthis may consider imposing fees on commercial ships through the southern Red Sea, adding to fears of supply disruptions and energy-driven inflation.

Latest closeGold $4,134.80 ▲2.4%|WTI crude $84.41 ▲6.5%

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