Gold Falls $23 as Fed Hikes Override War Premium

Spot Gold fell 0.54% to $4,354.74 as central bank rate hikes outweighed war-driven demand. The metal lost $23.65 despite Saudi airstrikes, showing rate fears dominate the market.

Three central banks raised rates in eight days, removing the last hope for a Fed pause. Minneapolis Fed President Neel Kashkari labeled inflation broad-based, killing the dovish case.

Hawkish Fed comments crush bullish momentum

The Fed raised last week, following the ECB and Bank of Japan. Gold sold into every hike, confirming that monetary tightening is the primary driver. Kashkari’s remarks on Sunday removed the final argument for rate cuts.

Policymakers project at least one more hike this year. Futures price in a hike by mid-2027, pushing back expected cuts. Gold remains stuck between moving averages with no clear directional momentum.

Technical resistance blocks the recovery

Gold trades above the 50-day moving average at $4,295.83. It remains below the 200-day moving average at $4,541.86, indicating a persistent downtrend on the daily chart. The recent high of $4,510.93 failed to break the August top.

Resistance sits at $4,384.59, with further barriers at $4,405.59 and $4,510.93. Support lies at $4,319.61 and the 50-day average. A break below $4,235.17 would confirm the lower low structure.

Physical demand fails to offset rate pressure

India’s gold demand stayed soft as buyers awaited lower prices. This lack of physical support removes a key layer of bid. China continued buying dips, but its demand could not counter the rate-driven selling.

Crude oil fell nearly $2, which should have lowered yields. Yields did not follow, leaving gold without the necessary economic tailwind. The chain of lower oil to softer Fed talk failed to materialize.