Gold faces bearish headwinds as Federal Reserve signals rate hikes

The yellow metal’s momentum stalled mid-week after the Federal Reserve opted to hold rates steady at 3.50% to 3.75% while explicitly leaving the door open for further tightening. This shift effectively strengthened the U.S. dollar and Treasury yields, dampening the appeal of non-yielding assets. The selling pressure intensified following reports of a preliminary peace agreement between the U.S. and Iran, which reduced the urgency for safe-haven hedging.

Institutional analysts are increasingly cautious. In the latest Kitco News survey, 70% of Wall Street experts predicted further declines, citing the Fed’s new leadership under Kevin Warsh and the potential for a sustained hawkish policy path. Conversely, retail investors on Main Street remain largely optimistic, with 54% anticipating a rebound. Market participants are now focused on upcoming economic indicators, including Q1 GDP and PCE inflation, to determine whether the recent price action represents a structural reversal or merely a temporary correction.