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Gold prices (XAU/USD) fell to a fresh 11-month low during the Asian session on Thursday, extending their bearish trend amid waning expectations of further Federal Reserve rate hikes. The decline accelerated after the metal tested the November 2025 lows, with technical indicators showing continued selling pressure. The US PCE price index, a key inflation gauge for the Fed, is due for release later this week, which could influence the trajectory of gold prices. Traders are closely monitoring whether the data will confirm slowing inflation, potentially delaying the Fed’s next rate decision.
The bearish momentum in gold is being driven by stronger-than-expected US economic data and a resilient dollar, which reduces the metal’s appeal as an alternative investment. A weaker dollar typically boosts gold demand, but recent economic resilience has kept the greenback firm. For markets, the focus remains on central bank policy direction, with the Fed’s stance on inflation dictating the next major move for gold. A surprise drop in PCE could trigger a short-term rebound, while a hotter-than-expected report would reinforce the bearish bias.
Looking ahead, investors should watch the US PCE release on Friday and the Fed’s subsequent policy signals. Technical analysis suggests a breakdown below the $2,000 level could open the door for further declines toward $1,950. However, oversold conditions in the short term might attract bargain hunters, creating volatility. The broader macroeconomic context, including oil prices and geopolitical risks, will also play a role in shaping gold’s near-term path.
