Gold Drops on Strong US Consumer Sentiment, Dollar Index Firms

Gold prices faced significant pressure following robust US consumer sentiment data that exceeded market expectations, strengthening the US dollar across the board. The improved sentiment readings suggest continued economic resilience, potentially supporting the Federal Reserve's higher-for-longer rate stance. The Dollar Index gained momentum, weighing on gold's appeal as a non-yielding asset. EUR/USD retreated from recent highs as dollar strength reasserted itself, while AUD/USD also came under pressure despite commodity currency support. The stronger consumer sentiment data reinforces expectations that the Fed may maintain restrictive monetary policy, creating headwinds for gold and supporting USD pairs. Technical analysis shows gold testing key support levels, with a break below potentially accelerating losses. For forex traders, the data supports a bullish USD bias against major pairs in the near term, particularly against commodity-linked currencies.