Gold drops to 1.5-month lows on rates and inflation

Gold hits 1.5-month lows amid Fed rate hike expectations, rising yields, inflation, and geopolitical risks. Markets await key US data for future direction.

Gold prices have faced significant bearish pressure, falling to a 1.5-month low near $4,480 before rebounding slightly to around $4,541. This downturn is largely due to rising global bond yields and expectations of further Federal Reserve rate hikes, fueled by strong economic data, persistent inflation, and ongoing geopolitical tensions, particularly the conflict involving the US and Iran. A stronger US dollar and limited new investment inflows have further weakened gold's position. While some analysts suggest that a shift in Fed policy could support a recovery, concerns over sustained inflation and a prolonged restrictive monetary stance continue to weigh on the metal. Currently, gold remains in a consolidation phase. Market participants are closely monitoring upcoming US employment and inflation data, which are expected to play a crucial role in determining the metal's future direction.