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Gold prices remained constrained near seven-week lows following a sharp 4% sell-off, as market expectations shifted toward a more hawkish Federal Reserve stance. Strengthening economic data and persistent inflationary pressures in the US have spurred traders to price in higher terminal interest rates and potential monetary tightening, eroding the yield appeal of non-interest-bearing bullion.
The decline in precious metals reflects a broader recalibration of macroeconomic expectations, boosting the US dollar and Treasury yields at the expense of gold. Financial markets are closely monitoring economic releases to determine whether the Federal Reserve will maintain high rates for a longer duration, which typically creates sustained headwinds for commodities.
Traders and investors should carefully observe coming economic data releases, including US inflation metrics and Fed official commentary, for guidance on monetary policy trajectories. Key support levels for gold will be critical in deciding whether the current corrective phase deepens or stabilizes into a broader trading range.
