• Spot gold extends its slide, last down 1.1% to $4,425.03/oz.
  • A stronger dollar and firming rate expectations are pressuring bullion.
  • Investors weigh central bank demand and geopolitical risks against macro headwinds.

Gold Pressures Mount

Spot gold continued its retreat on Wednesday, falling 1.1% to $4,425.03 per ounce, as a resilient dollar and shifting expectations for Federal Reserve policy dampened demand for the non-yielding asset.

The decline extends a multi-session losing streak, with prices trading in the low-to-mid $4,400s range. Traders cited a reassessment of the balance between safe-haven demand and appetite for risk assets amid evolving monetary policy signals.

“Gold is caught between competing forces — a stronger dollar and higher real yields on one side, and ongoing central bank buying and geopolitical uncertainty on the other,” said a senior metals trader at a European bank, asking not to be named discussing market positions.

Macro Headwinds Intensify

The dollar index edged higher, making gold more expensive for holders of other currencies. Meanwhile, expectations that the Fed may keep rates higher for longer have lifted real yields, reducing bullion’s appeal. Markets are pricing in a roughly 40% chance of a rate cut by September, down from 60% a month ago, according to CME FedWatch data.

“The near-term outlook for gold remains challenged if the dollar stays strong and rate cut bets continue to fade,” said a strategist at a German asset manager. “We could see a test of the $4,400 support level in the coming sessions.”

Central Banks Still Buying

Still, underpinning prices is robust central bank demand. The World Gold Council reported that global central banks added 95 tonnes to their reserves in the first quarter, up 15% from a year ago. China, Poland, and Turkey were among the largest buyers.

ETF flows have been more mixed. Gold-backed exchange-traded products saw net inflows in March but modest outflows in April, as some investors rotated into risk assets.

Geopolitical Support Remains

Geopolitical risks — including ongoing tensions in the Middle East and uncertainty around trade negotiations — continue to provide a floor for prices. A fresh escalation could quickly reverse the current downtrend, analysts warn.

“Gold’s sell-off looks technical and macro-driven, but the geopolitical backdrop is still supportive,” said a commodities analyst at a Swiss bank. “If we get a catalyst, prices could rebound sharply.”

Looking Ahead

Market participants are watching for upcoming U.S. economic data, including weekly jobless claims and the April consumer price index, for further clues on the rate path. A weaker-than-expected reading could reignite gold buying.

On the supply side, mine production remains steady, while recycling flows are sensitive to price levels.

Correction: A previous version of this article misstated the day’s percentage decline; it has been updated to 1.1%.

— With assistance from market sources.