Gold extended its decline on Thursday after falling to a more than seven-month low of $3959 the previous session, as the price fell below the EMA (9) on the four-hour chart. The yellow metal is currently trading below the daily pivot point depicted at $4,025, where a break below the first daily support of $3,934 could trigger further decline towards the second support level of $3,869. On the upside, if the price reclaims the pivot point, it may rise towards resistance levels of $4,090 then $4,180.
The U.S. dollar remained near its highest level in more than a year on Thursday despite a modest pullback, as investors continued to price in a more aggressive Federal Reserve policy outlook. Market expectations for three additional U.S. interest rate hikes before the end of 2026 strengthened following resilient economic data and persistent inflation concerns, boosting Treasury yields and supporting the greenback. Meanwhile, Brent crude futures extended their recent decline, trading near $73.40 per barrel as easing geopolitical tensions and expectations of slower global demand growth weighed on oil prices. Together, these developments reflect a market environment shaped by tighter monetary policy expectations, a stronger dollar, and growing concerns over the outlook for global energy demand.
Market Watch
Dollar Eases but Remains Near Its Highest Level in More Than a Year
The U.S. dollar edged lower during Thursday’s trading session against a basket of major currencies but remained close to its highest level in more than a year, supported by growing market expectations that the Federal Reserve could raise interest rates in the coming months.
The U.S. Dollar Index, which measures the greenback against a basket of six major currencies, recently reached its highest level since May 2025 before coming under limited profit-taking pressure. Despite the pullback, the dollar continues to hold on to strong gains amid a widening gap between U.S. Treasury yields and those of other major economies.
Investors continue to monitor upcoming U.S. economic data, particularly the Federal Reserve’s preferred inflation indicators, for further clues on the future path of monetary policy. Expectations of continued resilience in the U.S. economy have also supported demand for the dollar as a safe-haven asset.
Meanwhile, gold prices remained under pressure due to the strength of the U.S. currency and rising interest rate expectations. The precious metal fell to its lowest level in more than seven months, while other major currencies continued to face headwinds against the dollar.
Markets Expect Three Additional U.S. Interest Rate Hikes This Year
Financial markets have strengthened their bets on further monetary policy tightening in 2026, with expectations growing that the Federal Reserve will deliver three additional interest rate hikes before the end of the year amid persistent inflationary pressures and continued strength in the U.S. economy.
Interest rate futures pricing indicates that investors expect the Fed to maintain a hawkish stance after recent economic data came in stronger than anticipated, particularly in the labor market and consumer spending sectors. Rising U.S. Treasury yields have further reinforced these expectations, as market participants increasingly believe the central bank will continue its efforts to bring inflation back to its 2% target.
Against this backdrop, the U.S. dollar climbed to its highest level in more than a year against a basket of major currencies, while gold prices faced additional pressure as higher interest rates increased the opportunity cost of holding non-yielding assets.
Investors are now awaiting upcoming U.S. inflation figures and economic activity indicators, which could provide further guidance on the timing and magnitude of future Federal Reserve actions. Analysts believe that any upside surprises in the data may encourage markets to increase their expectations for additional rate hikes during the second half of the year.
Brent Crude Futures Fall to Trade Near $73.40 per Barrel
Brent crude futures declined during Thursday’s trading session, trading near $73.40 per barrel as prices extended recent losses amid easing concerns over supply disruptions in the Middle East and a renewed focus on market fundamentals.
Oil prices came under pressure as the geopolitical risk premium that had supported the market in recent weeks continued to fade. Market reports indicated that crude supplies were flowing normally through key shipping routes, helping to alleviate concerns about potential disruptions. Expectations of slower growth in global energy demand also contributed to increased selling pressure on crude prices.
At the same time, investors continue to assess the impact of U.S. monetary policy on the global economic outlook, as higher interest rates for a prolonged period could weigh on economic activity and reduce demand for fuel and energy products.
Looking ahead, market participants will closely watch U.S. inventory data and production developments among members of the Organization of the Petroleum Exporting Countries (OPEC) and its allies for fresh signals on the balance between supply and demand in the global oil market. Analysts suggest that abundant supplies combined with slower demand growth could keep Brent crude under pressure in the near term.
Looking Ahead
Financial markets are awaiting the release of key U.S. economic data later today, including the Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve’s preferred measure of inflation, as well as weekly Initial Jobless Claims figures. Investors view these indicators as crucial signals regarding the strength of the U.S. economy and the future path of monetary policy. The results are expected to have a significant impact on the U.S. dollar, Treasury yields, and broader financial markets, while also influencing the outlook for gold prices and other risk-sensitive assets.