Gold Falls Below $4,300 as Fed's Hawkish Signals Weigh

Spot gold traded near $4,289 in early Asian hours on Thursday, extending its recent downward pressure. The metal had already lost the $4,300 threshold, as hawkish signals from Federal Reserve policymakers boosted market expectations for further rate hikes, directly pressuring the non-yielding asset.

**Hawkish Signals Dominate Short-Term Selling Pressure**

St. Louis Fed President Alberto Musalem said further rate hikes may still be needed in the future, citing inflation that remains too high and resilient demand. Chicago Fed President Austan Goolsbee also shifted to a hawkish stance; according to the Financial Times, he believes that if persistent inflation is driven mainly by strong demand and AI-related investment rather than temporary supply shocks, a more aggressive policy response would be necessary. These remarks reinforced market expectations that the Fed will maintain tightening, strengthening the dollar and Treasury yields, which raised the opportunity cost of holding gold.

**Yields and Oil Prices Form a Double Squeeze**

The 10-year U.S. Treasury yield had already broken above the 5.0% mark, and the dollar index stood above 99.40, forming the underlying driver of gold's weakness. Meanwhile, a rebound in oil prices reignited inflation concerns, with Brent crude rising about 1.7% after four consecutive sessions of declines, approaching $102 per barrel. TD Securities analyst Ryan McKay noted that gold's earlier resilience had benefited mainly from falling energy prices, but the renewed rebound in oil means this support could quickly fade.

**Key Support Zone Under Test**

Gold has approached its 100-day moving average near $4,318, with the $4,300-$4,320 zone becoming the most important short-term support band. Cathay United Bank Chief Economist Lin Chi-chao said gold has recently been trading largely within a $4,300-$4,450 range; short-term upside is limited by rate hike expectations, but central bank buying continues to provide underlying support, leaving relatively limited room for a sharp decline. The market is closely watching the Fed's upcoming rate decision and latest dot plot; if the dot plot signals further room for rate hikes, gold could remain under pressure in the near term.