Gold prices have fallen more than 4% since Wednesday's trade as the market digested the Fed's hawkish statement after the FOMC report, giving room for the USD to strengthen higher.
At 9:30 AM, gold prices were trading at $4,190, down 0.43% since it opened early Friday in Asian trading.
Risk sentiment continued to dominate global financial markets, driven by optimism that the conflict in the Middle East is easing and strong performance by technology stocks. The development came despite the Federal Reserve taking a more aggressive stance on monetary policy.
The Fed kept interest rates at a range of 3.50% to 3.75%, but the latest projections show nine of 19 policymakers expecting a rate hike before the end of the year.
The market is now pricing in an 85% probability of a rate hike in December, up from 61% before the policy announcement. Analisabon Indonesia
The Fed's hawkish stance continues to support the strengthening US dollar and put pressure on gold prices. The US Dollar Index (DXY) rose to 100.81 on Thursday, its highest level since May 2025.
In its latest economic projections, the Fed expects inflation to continue to decline to 3.6% in 2026 before reaching its 2% target by 2028. US economic growth is expected to moderate with GDP growing by 2.2% this year, while the unemployment rate is expected to remain stable.
The latest data also shows that the US labor market remains strong as initial jobless claims fell to 226,000 from 230,000 the previous week.
Next week, investors will focus on Flash PMI data, employment reports, final readings of first-quarter 2026 GDP and the Core Personal Consumption Expenditures (Core PCE) Price Index, which is the Fed's preferred inflation indicator.
