Gold plunged to approximately $4,050 during early Asian trading Thursday, marking its lowest level since November 2025, as hotter-than-expected US inflation data triggered renewed bets on Federal Reserve hawkishness. The XAU/USD pair tumbled sharply as market participants recalibrated expectations for monetary policy, with stronger inflation prints reducing the likelihood of near-term rate cuts that typically support precious metals. The selloff accelerates a trend that has pressured bullion throughout recent sessions as investors rotate away from non-yielding assets amid elevated interest rate expectations.
The move impacts commodity traders, forex brokers, and portfolio managers with gold exposure, while creating volatility opportunities for technical traders. Higher Fed rate expectations strengthen the dollar and increase opportunity costs for holding gold, which pays no interest or dividends. Market participants are now reassessing safe-haven allocations as monetary policy outlook shifts.
FXnCO Insight
Traders should monitor upcoming Fed commentary closely, as continued hawkish signals could push gold toward the psychologically critical $4,000 level in coming sessions.
Source: FXStreet