Gold drops on stronger US dollar, rising bets on higher interest rates | Metals Mine

  • Gold drops on stronger US dollar, rising bets on higher interest rates

    From kitco.com

    Gold prices ​fell on Thursday as the U.S. dollar and oil prices rose after President Donald Trump said the U.S. would continue attacks on Iran, spurring inflation concerns and bolstering expectations of higher interest rates. Spot gold was down 2% at $4,660.95 per ounce as of 11:22 a.m. ​EDT (1522 GMT), after hitting a two-week high earlier in the session. U.S. ​gold futures fell 2.6% to $4,686.80. The dollar rose sharply, making greenback-priced bullion less ⁠affordable to other currency holders. "The market is very focused on Trump's comments, which ​so far offer little sign of a quick resolution to the energy ... (full story)

Comment Options
Trader#5CF4
Apr 2, 2026 2:05pm
Permalink
As long as this delusion in the market persists, the more opportunity we have to buy precious metals and crypto cheap. Once the markets wake up to the fact that higher inflation will not lead to higher interest rates by the Fed, this current trend of strong USD will quickly reverse. For the time being, USD will remain strong and will probably get even stronger as the price of oil is ready to deliver its last spike up, as is always the case with the price of oil. Price of oil topping should also mean the USD topping in absolute term (against precious metals for example) and possibly in the relative term as well (against other currencies), although it's not as clear as with precious metals. Fed's meeting in June should make the fears of the Fed potentially hiking rates due to higher inflation completely vanish and this is when the rapid recovery in precious metals, crypto, etc... market will take place. This is when the USD loses its wings and starts crashing in absolute term.

It's important to understand that the current trend of the strong USD will not last for much longer.

Even if the Fed starts hiking rates (which would only slow down the inevitable, which is further decline of the USD in absolute term), they will never catch up with inflation. It'll take some time before the markets realize this, however markets will wake up eventually. And then, it's a runaway train which will force the central banks to really hike rates agressively to double digits or the trust in the currencies and the system will collapse.
Reply
FlyingTurtle
Apr 2, 2026 3:08pm
Permalink
You underestimate the fed's only tool: cheerleading! Of course they have no intention of hiking rates, but that doesn't mean they won't incessantly threaten hikes every chance they get. The market can be fooled infinitely, so each threat ratchets the USD higher.

I agree real rates will go down but the question is: does the market care in the slightest?
Reply
View 0 more replies to Trader#5CF4
Hide replies to Trader#5CF4
    •   Newer Stories
    Gold slides over 2% as Trump extends Iran operation, lifts USD bids

    From fxstreet.com|Apr 2, 2026

    Gold price recoils by some 2% as the US Dollar rises after US President Donald Trump revealed that the war on Iran would last from two to three weeks, pouring cold water on hopes ...

    US imposes 25% tariff on steel, aluminum, copper derivatives

    From @NourHammoury|Apr 2, 2026|6 comments

    *US IMPOSES 25% TARIFF ON STEEL, ALUMINUM, COPPER DERIVATIVES Fact Sheet: President Donald J. Trump Strengthens Tariffs on Steel, Aluminum, and Copper Imports Today, President Donald J. Trump signed a Proclamation to strengthen tariffs imposed on imported steel, aluminum, and copper in order to more effectively address the national-security threat posed by such imports. The Proclamation defines the way that tariffs are assessed, ensuring that they reflect the full value of imported steel, aluminum, and copper products—not an artificially low foreign price. The Proclamation also establishes clear rules for calculating Section 232 metals tariffs. Articles made entirely or almost entirely of aluminum, steel, or copper will pay a flat 50% on their full value — for example, steel coils and aluminum sheet. Derivative articles substantially made of steel, aluminum, or copper will pay a flat 25% on their full value. Certain metal-intensive industrial equipment and electrical grid equipment will pay 15% through 2027, to accelerate the massive industrial base buildout currently underway across the United States. Products made abroad but entirely with American steel, aluminum, and copper will be subject to lower tariffs of 10%. Products made of 15% or less steel, aluminum, or copper will no longer be subject to Section 232 metals tariffs. STRENGTHENING ECONOMIC AND NATIONAL SECURITY: President Trump has strengthened tariffs on imported aluminum, steel, and copper to protect the national security of the United States, including the economic resilience of vital industries and the financial position of American workers. *US TO IMPOSE 100% TARIFF ON PATENTED DRUGS, HONORING EXEMPTIONS

    Fed's Williams: Higher energy prices hit both sides of Fed's mandates

    From @financialjuice|Apr 2, 2026|4 comments

    Fed's Williams: Higher energy prices hit both sides of fed's mandates. FED'S WILLIAMS: INFLATION WILL SHOW UP IN STATISTICS AS TIME GOES ON. ... Fed's Williams: It takes months or a year for energy prices to work through the economy.

  • Story Stats

  • Related Stories