This article first appeared on GuruFocus.
Gold (GLD) is losing momentum just as macro pressure builds in the background. Bullion fell for a seventh straight session, at one point dropping as much as 1.5% after earlier rising 1%, putting it on track for its longest losing streak since October 2023. As of 3:28 p.m. in Singapore today, spot gold was down 1.2% at $4,760.71 an ounce, reflecting a sharp intraday reversal. The shift comes after the Federal Reserve held rates steady at its latest meeting and projected only one cut this year, with Chair Jerome Powell signaling that any easing would depend on inflation showing clearer signs of slowing, while officials also flagged growing economic uncertainty tied to the geopolitical backdrop.
That backdrop is becoming harder to ignore. Oil rallied after Iran and Israel exchanged strikes on key energy facilities in the Persian Gulf, nearly three weeks into the conflict, pushing crude and gas prices higher and raising inflation risks. That dynamic could reduce the likelihood of near-term rate cuts from the Fed and other central banks, creating a more challenging setup for gold, which does not offer yield. At the same time, a stronger US dollar has added pressure across commodities. Despite the recent pullback, bullion is still up more than 10% this year, though the rally has stalled, with prices falling nearly 9% from the start of the conflict on Feb. 28 through Wednesday’s close after reaching a record above $5,595 an ounce in late January.
Still, the medium-term picture remains more balanced. Market participants suggest gold may be entering a consolidation phase rather than a sustained downturn, with expectations that it could trade within a broad range between $4,500 and $5,500 an ounce. While tighter monetary conditions and dollar strength may weigh in the near term, there is a view that if inflation rises faster than policy rates, real yields could decline, which may support gold over time. Adding another layer of uncertainty, Powell said he has no intention of resigning amid a Department of Justice investigation and would remain in place until the probe is complete, a development that could raise questions around institutional stability and potentially support safe-haven demand.