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>>Gold falls beneath $4,600 as inflation figures prompt a hawkish Fed rate outlook

Gold falls beneath $4,600 as inflation figures prompt a hawkish Fed rate outlook

crypthub

about 5 hours ago

Price Drop and Inflation Shock

Spot gold fell to $4,572 per ounce, sliding below $4,600 after core CPI rose 0.4% month‑over‑month, pushing annual inflation to 3.6%. The market now assigns a 72% probability to a 25‑basis‑point Fed rate hike at the March meeting, up from 45% a week earlier. Higher expected rates increase the opportunity cost of holding non‑yielding gold.

Fed Hawkish Tone and Dollar Strength

Fed Chair Jerome Powell emphasized a data‑dependent stance, signaling possible further hikes. A stronger U.S. dollar (+0.6%) and rising real yields, with the 10‑year TIPS yield at 2.1%, have added pressure to gold, which is priced in dollars. Historical patterns show gold often underperforms for three to six months after the first rate hike in a tightening cycle.

Impact on Mining Stocks and Outlook

Gold‑mining equities dropped about 3%, with Newmont and Barrick each losing over 4%, while the SPDR Gold Trust saw $1.2 bn of outflows. Technical analysis highlights $4,500 as key support and $4,400 if that level breaks, accompanied by a bearish “death cross” on moving averages. Long‑term investors may view the dip as a buying opportunity, but short‑term traders face headwinds until inflation eases.