Gold Prices Under Pressure as June Fed Rate Cut Odds Plunge to 33.5%

Key Facts

1FedWatch tool slashed the probability of a June Fed rate cut to 33.5%.

2Gold prices stalled below the $5419.66 level as monetary easing expectations faded.

3The gold market is facing pressure from rising bond yields and a strengthening US Dollar.

Gold prices are facing significant downward pressure as market expectations for a Federal Reserve interest rate cut in June have sharply diminished. According to the FedWatch tool, the probability of a rate reduction has been slashed to just 33.5%, causing prices to stall below key resistance levels. This shift is primarily driven by a strengthening US Dollar and rising Treasury yields, which increase the opportunity cost of holding non-yielding bullion. Investors are recalibrating their portfolios as the prospect of 'higher for longer' interest rates gains momentum. The market remains highly sensitive to upcoming economic data that could further influence the Fed's monetary policy path. Consequently, the gold market continues to struggle against the headwinds of a hawkish macroeconomic environment.