Gold Price Extends Weekly Losses as Strong Dollar and Fed Expectations Weigh on XAU/USD
Gold prices remain under pressure, extending losses for a fourth consecutive week as investors continue to favor the US Dollar amid expectations that interest rates will remain elevated for longer.
The precious metal has fallen to its lowest level since mid-June, with growing confidence in the US economy and hawkish Federal Reserve commentary reducing demand for traditional safe-haven assets. Despite ongoing geopolitical tensions, Gold has struggled to attract meaningful buying interest as financial markets focus on monetary policy and rising Treasury yields.
Why Gold Is Falling The primary factor behind Gold's recent weakness is the expectation that the Federal Reserve will keep interest rates higher for longer. Higher interest rates increase the opportunity cost of holding non-yielding assets such as Gold, making the precious metal less attractive compared to interest-bearing investments.
At the same time, the US Dollar has remained resilient, further pressuring Gold prices as a stronger Dollar makes bullion more expensive for international buyers. Adding to bearish sentiment, concerns surrounding energy supply disruptions have eased following the stabilization of shipping activity through the Strait of Hormuz, reducing safe-haven demand.
Goldman Sachs Lowers Gold Forecast Another significant development came from Goldman Sachs, which revised its year-end Gold forecast lower. The investment bank reduced its target from $5,400 to $4,900 per ounce, signaling growing caution among major institutional investors. The forecast downgrade reflects expectations that US interest rates may remain elevated longer than previously anticipated, limiting Gold's upside potential.
Technical Outlook Gold remains trapped in a broader corrective phase after failing to sustain recent recovery attempts. Selling pressure continues to dominate while prices remain below key resistance zones. Bearish Scenario 📉 Support 1: $4,100 📉 Support 2: $4,050 📉 Support 3: $4,000 A break below these levels could trigger a deeper correction as bearish momentum accelerates.
Bullish Scenario 📈 Resistance 1: $4,150 📈 Resistance 2: $4,200 📈 Resistance 3: $4,300 For buyers to regain control, Gold must reclaim these resistance levels and attract fresh safe-haven demand.
Market Outlook The short-term outlook for Gold remains bearish as traders focus on Federal Reserve policy, interest rate expectations, and US Dollar strength. While geopolitical uncertainty may continue providing long-term support, the immediate direction of Gold will likely depend on economic data and signals from US policymakers. Unless expectations for higher interest rates begin to fade, Gold could remain vulnerable to additional downside pressure in the weeks ahead.
