Gold plunged to its lowest level in six months on Thursday, erasing all gains accumulated throughout the year as traders recalibrate positions amid mounting expectations that central banks will maintain elevated interest rates for an extended period. The XAU/USD pair faced intense selling pressure as hawkish monetary policy outlooks from major central banks continue to strengthen the dollar and push real yields higher, making non-yielding gold increasingly unattractive. Technical selling accelerated the downward move as key support levels broke, with buyers remaining absent from the market. The decline marks a significant reversal for the precious metal, which had shown resilience earlier in the year during periods of banking sector stress and geopolitical tensions. Traders, asset managers, and retail investors holding gold positions are facing mounting losses as the higher-for-longer rate narrative gains traction across global markets.
FXnCO Insight
Gold’s technical breakdown suggests further downside risk remains until central banks signal a credible shift toward rate cuts, making defensive positioning or alternative safe-haven assets prudent for near-term portfolio protection.
Source: FXStreet