Gold Struggles Below $4300, Hits One-Week Low as Fed Rate Hike Bets and Iran Risks Support Dollar

Spot gold hit a one-week low during Thursday's Asian session, trading near $4,283.64, failing to extend its earlier decline. The dollar remained firm, supported by both hawkish Federal Reserve expectations and Middle East geopolitical risks, continuing to pressure the non-yielding precious metal.

**Fed Rate Hike Bets Dominate Dollar Moves**

According to the CME FedWatch tool, traders see a 90% probability of a rate hike in December, with the market nearly fully pricing in expectations of further Fed policy tightening. St. Louis Fed President Musalem and Chicago Fed President Goolsbee both explicitly supported continued rate hikes to curb persistently elevated inflation risks. The dollar index extended its recent gains, having earlier touched a high not seen since July 30, which became a key factor weighing on gold prices.

**Geopolitical Risks and US-China Meeting as Short-Term Variables**

Iranian Foreign Minister Araghchi met with US envoy Witkoff, reiterating Tehran's conditions for reopening the Strait of Hormuz, with Trump saying talks were progressing well but without revealing details. Meanwhile, market focus shifted to the Trump-Xi meeting. According to market sources, expectations for major announcements are low, but any progress on rare earths or technology restrictions, as well as whether the current US-China truce can be extended, could still trigger volatility in the precious metals market.

**Technical Support Under Test**

According to a report by UBS analyst Joni Teves, gold investors may have largely priced in monetary policy tightening expectations and are beginning to place greater emphasis on portfolio diversification value and the ongoing trend of official sector gold purchases. She expects the likelihood of gold prices rising before year-end is increasing, but a Fed rate hike could still trigger a knee-jerk pullback. On the technical front, the 100-day moving average sits near $4,331, almost overlapping with the 50% Fibonacci retracement level of the July-August rally at around $4,328, with the $4,290-$4,310 zone below viewed as a key watershed.