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Gold prices fell to a new low since March 30, reaching $4,500 per ounce, driven by a stronger U.S. Dollar and increased expectations of a hawkish Federal Reserve. The Asian session saw a brief rebound above $4,500, but sustained USD strength and tightening monetary policy pressures have kept the precious metal under pressure. The Fed’s potential rate hikes and inflation concerns are key factors undermining gold’s appeal as a hedge asset.
The decline highlights the inverse relationship between gold and the USD. A stronger dollar makes gold more expensive for holders of other currencies, reducing demand. Traders are closely monitoring Fed Chair Jerome Powell’s upcoming comments and U.S. economic data for clues on rate trajectory. This volatility could impact portfolio allocations and hedging strategies in global markets.
For Gulf investors, the USD’s dominance in regional trade and energy markets amplifies the significance of this trend. A prolonged USD rally could weaken gold’s role as a safe-haven asset in MENA portfolios. Key levels to watch include $4,450 (support) and $4,600 (resistance). Central bank gold purchases and geopolitical risks may provide short-term counterbalance.
