Gold Price Falls to $3,350 on USD Strength, Market Awaits Fed Policy Signal

Gold Price Slips Toward $3,350 as USD Strength Extends and Fed Uncertainty Looms

The Gold price (XAU/USD) continued to slide on Friday, marking its third consecutive daily loss, as investors flocked to the strengthening US Dollar (USD) amid mounting expectations that the Federal Reserve (Fed) will hold rates steady at next week’s policy meeting. The yellow metal was last seen drifting toward the $3,350 mark during early European trading hours.

US Dollar Extends Gains on Fed Hold Expectations

Following Thursday’s US macroeconomic data, market sentiment has firmed around the belief that the Fed will leave interest rates unchanged, supporting a second day of USD buying. This trend has pushed flows away from non-yielding assets like gold, which tend to underperform in a rising dollar environment.

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Trade Optimism Caps Safe-Haven Appeal

Market optimism regarding global trade—particularly progress in US-China and US-EU trade negotiations—continues to suppress demand for safe-haven instruments. This risk-on environment further reduces investor appetite for gold, which thrives on geopolitical and economic uncertainty.

However, a softening tone in equity markets may cushion gold’s losses slightly, as some risk-off positioning emerges ahead of next week’s Fed event.

Fed Autonomy Concerns May Limit Gold Downside

Despite near-term pressure, some investors remain cautious about the Fed’s independence, which has been a recurring concern in policy circles. Should doubts resurface, it could undermine USD momentum and limit downside for gold in the run-up to the FOMC announcement.