Gold Prices Slip Over 2% as Hawkish Central Bank Signals Weigh on Market

Context Gold has traded in a $4,650‑$4,850 range for weeks, finding support near $4,700 but struggling to break above $4,800. The dollar index rose as markets priced in fewer rate cuts, making gold more expensive for foreign holders. Meanwhile, the SPDR Gold Shares ETF (GLD) holds a market cap of roughly $60 billion and fell 1.8% in tandem with spot prices.

Key Facts Spot gold (XAUUSD) traded at $4,716.10/ounce, a decline of over 2% from the prior Friday’s close. Lukman Otunuga of FXTM said central banks are likely to hold or raise rates, calling this hawkish stance bad for gold despite safe‑haven demand. Ole Hansen of Saxo Bank warned that growing US fiscal pressures from tariff‑ and military‑related debt pose a bigger risk to gold’s outlook than the Fed’s steady stance.

What It Means Higher rates increase the yield on interest‑bearing assets, lowering gold’s relative attractiveness and strengthening the dollar, which depresses dollar‑denominated gold prices. Fiscal deficits add uncertainty about long‑term debt sustainability, potentially boosting safe‑haven demand but also raising inflation concerns that could keep rates elevated. Technically, gold fell below its 100‑day moving average; a weekly close below that level could open a path toward $4,600 and then $4,450, while holding above $4,700 might test the 50‑day average near $4,870‑$4,900.

Watch next week’s US Q1 GDP and PCE inflation releases, plus the Fed’s policy meeting, for clues on whether rates will stay high or begin to ease.