XAU/USD Hits 4-Week Low at $2,720 as Fed Rate Cut Hopes Diminish

Gold prices fell to a four-week low of $2,720 per ounce, declining 1.8% as diminishing Federal Reserve rate cut expectations bolstered the US dollar. The Dollar Index (DXY) strengthened 0.5% to 104.20, pressuring the non-yielding metal. Strong US economic data, including robust employment figures and persistent inflation readings, have reduced market expectations for aggressive Fed easing in 2025. The shift in monetary policy outlook has increased real yields, making gold less attractive to investors. Technical analysis shows XAU/USD breaking below the key support at $2,735, with the next major support level at $2,700. The Nasdaq 100 also showed weakness, falling 0.7% as tech stocks retreated. EUR/USD dropped 0.3% to 1.0815 amid broad dollar strength. Gold traders are now focusing on upcoming CPI data which could further influence Fed policy expectations and gold's near-term direction.