Gold drops 0.8% post-Fed cut as traders reassess inflation outlook

Gold spot prices retreated 0.8% to $2,645 per ounce following the Federal Reserve's rate decision, as traders weigh persistent inflation risks against monetary easing. Despite the Fed delivering an expected rate cut, gold's typical inverse correlation with real yields broke down amid concerns about sticky inflation. The dollar index gained 0.3%, adding pressure on the precious metal. Market participants are recalibrating expectations for the Fed's easing cycle, with inflation concerns tempering rate cut enthusiasm. Technical analysis shows gold breaking below the $2,650 support level, targeting $2,630 as the next key support. Bitcoin also declined 1.2% to $62,500, reflecting broader risk-off sentiment in alternative assets. For forex traders, gold's weakness supports dollar strength against commodity-linked currencies like AUD and NZD, while safe-haven demand shifts toward USD and JPY.