Gold retracts sharply from recent highs, influenced by reduced geopolitical risks and a strengthening US Dollar.
Fed officials, including Chairman Powell, maintain a hawkish stance on interest rates, pressuring Gold prices.
Market sentiment shifts as expectations for Federal Reserve rate cuts are adjusted to a later timeline.
Gold prices plummet sharply and retrace last week's gains, down more than 2.50% as the Middle East's woes abate. The pullback in the price of gold metal could be attributed to profit-taking, as mentioned by Jim Wyckoff of Kitco News, alongside some modest strength in the US Dollar.
XAU/USD trades at $2,329 after hitting a daily high of $2,392, sponsored by last Friday’s increasing tensions between Israel and Iran. Also, market participants are beginning to price out that the Federal Reserve (Fed) would cut rates later than expected, further weighing on Gold prices.
Tehran downplayed Israel’s retaliation drone strike on April 19 in what was perceived as an escalation of the conflict.
Elsewhere, Federal Reserve officials struck hawkish remarks led by Chairman Jerome Powell, who commented that the lack of progress on the disinflation process warrants keeping interest rates higher for longer. Echoing his comments was Chicago Fed, Austan Goolsbee, one of the most dovish members of the FOMC, who said that progress on inflation has “stalled.”
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