Gold Pressured by Stronger US Dollar and Fed Speculation

Gold prices extended their decline for a fourth consecutive day, falling as the US Dollar strengthened significantly across the board. The dollar's ascent was fueled by expectations of a Federal Reserve rate hike later this year, supported by strong economic data and rising US Treasury yields.

US Dollar Dominates Currency Markets

The US Dollar Index surged to a multi-week high, outperforming its peers as robust US data and higher inflationary pressures bolstered bets on Fed tightening. Consequently, a wide range of currencies, including the Euro, Swiss Franc, Canadian Dollar, and New Zealand Dollar, experienced significant declines against the greenback.

Mixed Signals from Global Trade and Geopolitical Events

Markets digested developments on the trade and geopolitical fronts, with US President Trump announcing "fantastic trade deals" with China, which briefly lifted risk appetite. However, Asian equities later fell, while tensions related to the Strait of Hormuz persisted, impacting currencies like the Indian Rupee and contributing to a rise in WTI oil prices.

Diverging Central Bank Policies and Currency-Specific Pressures

Central banks outside the US are navigating their own economic challenges, with a Reuters poll indicating the Bank of Japan is now expected to raise interest rates later this year. Meanwhile, the British Pound faced headwinds from domestic political strain, and Indian authorities enacted policy measures to support the Rupee amid concerns over capital flows and elevated oil prices.