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Gold holds below $4,400 as USD strengthens after two-month low

A firmer US Dollar, driven by hawkish Fed expectations linked to higher oil, is weighing on XAU/USD below $4,400.

Reported · Written up by our desk · Major Pairs

Gold (XAU/USD) stayed below the $4,400 level in early European trading on Tuesday, snapping a two-day winning streak as a broadly firmer US Dollar extended its rebound from a two-month low, according to FXStreet.

FXStreet cited inflation risks tied to higher oil prices and a geopolitical risk premium from the US-Iran standoff as factors supporting the Greenback, which typically weighs on gold.

US President Donald Trump said Iran should surrender to end a nearly six-month war and noted the US is not seeking an extension of a memorandum of understanding with Iran that expired Monday. FXStreet also pointed to escalation by Iran-backed Houthi rebels, which targeted Saudi forces near Mokha and could disrupt shipping through the Bab al-Mandeb Strait, contributing to energy supply concerns.

The report added that traders are focused on the Federal Reserve outlook, with CME Group’s FedWatch Tool assigning about a 64.0% chance that rates will be kept unchanged at the September 2026 meeting, even as markets still price in at least one possible hike by the end of 2026. FXStreet said the combination of renewed USD demand and elevated Treasury yields is pressuring gold, limiting downside but keeping directional bets cautious.

Latest closeGold $4,432.00 ▲1.6%

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