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Gold prices (XAU/USD) fell for the third consecutive day, reaching a one-week low of $4,121, extending a three-week losing streak. The decline follows increased speculation about the Federal Reserve's potential tightening cycle, which typically weakens gold's appeal as higher interest rates make non-yielding assets less attractive. Traders are closely monitoring Fed policy signals and inflation data, which could determine gold's short-term trajectory.
The bearish momentum highlights the inverse relationship between gold and real interest rates. A Fed pivot toward tighter monetary policy would likely pressure gold further, while any dovish shift could provide a bounce. Market participants are also assessing geopolitical risks and central bank demand, which have historically acted as safe-haven drivers for gold.
Investors should watch upcoming U.S. inflation reports and Fed officials' comments for clues on policy direction. Technical levels near $4,100 and $4,000 may become critical support zones. For Gulf investors, the interplay between dollar strength and gold's safe-haven role remains pivotal in portfolio allocation decisions.
