Gold Tumbles on Fed Hawkish Signals and Dollar Surge, Oil Prices Provide Support

Spot gold slipped 0.6%, trading at $4,232.01 an ounce – the lowest level since early November 2025 – as a stronger dollar and a more hawkish stance from the Federal Reserve weighed on the metal. U.S. gold futures fell 3.1% to close at $4,245.90.

"The Fed’s hawkish tilt yesterday pushed the dollar to new year‑highs, putting pressure on gold," said Peter Grant, vice‑president and senior metals strategist at Zaner Metals.

Although the Fed left rates unchanged on Wednesday, nine of the 19 policymakers indicated that a rate hike later in the year is likely. Market expectations now put an 88% probability on a December rate increase, up from 61% before the Fed’s statement. The dollar’s rise to a one‑year peak makes greenback‑priced bullion more expensive for overseas buyers.

Gold, a non‑yielding asset, typically struggles when interest rates climb, and the metal has faced downward pressure since the start of the Middle East conflict, when rising fuel costs amplified inflation worries.

The U.S. and Iran released the text of an interim ceasefire agreement that has eased inflation concerns and pulled oil prices lower, providing a floor for gold. Brent crude fell to its lowest level since March 2, the first trading day after the initial U.S.–Israeli strikes on Iran, while WTI crude slid to its lowest since March 4.

The agreement, signed by the presidents of the two nations, also included a warning from U.S. President Donald Trump that attacks could resume and Iranian officials could be targeted if commitments were not honored.

Overall, the combination of a hawkish Fed outlook, a stronger dollar, and a dip in oil prices has kept gold in the red for the day, though the recent oil decline offers some support for the metal’s future trajectory.