Gold Slides Below $4,000 as Dollar Strengthens and Rate Cut Hopes Dim
Gold prices tumbled below $4,000 per troy ounce as the U.S. dollar surged and expectations for a December rate cut faded. The DXY, which tracks the dollar against major currencies like the euro and yen, climbed to new highs, pressuring the precious metal.
"A stronger dollar typically weighs on Gold demand," said David Meger of High Ridge Futures. "The market is also adjusting to reduced odds of a Fed rate cut this year." Gold's inverse relationship with the dollar and interest rates remains a key dynamic—when the greenback strengthens, gold becomes more expensive for foreign buyers.
The opportunity cost of holding non-yielding gold rises when interest-bearing assets like Treasury bonds offer higher returns. With rate cut expectations cooling, this calculus has shifted against the yellow metal.
