Gold Prices Retreat on Fed Rate Hike Expectations

Gold prices lost momentum, declining to near the $4,100 level as market sentiment shifted. The move was primarily attributed to strengthening expectations that the US Federal Reserve will implement an interest rate hike later this year in response to persistent inflation concerns.

US Dollar Hits Multi-Month High on Strong Economic Data

The US Dollar Index surged to its highest level in over a year, exerting significant pressure on commodity prices. This rally was fueled by resilient S&P Global PMI data, which showed US business activity at its strongest since May 2022, reinforcing the case for a more hawkish central bank policy.

Broad Risk Aversion Weakens Global Currencies

A risk-off mood in the markets, highlighted by a downturn in technology shares, prompted a flight to the US Dollar. This trend resulted in widespread weakness for other major currencies, with the Australian Dollar, Canadian Dollar, Swiss Franc, and British Pound all registering losses against the strengthened greenback.