Gold Slips Further as Hawkish Fed Outlook and Strong Dollar Curb Bullion Appeal

The Warsh Effect and Interest Rates

The transition to a more hawkish Federal Reserve leadership is the primary driver of the current gold slump. Markets are now anticipating fewer rate cuts in 2026, which has revitalized the dollar and raised real yields, making gold's safe-haven status less attractive to institutional desks.

Technical Support and Physical Demand

Despite the sell-off, physical demand in major hubs like India and China remains a focal point. Retail buyers are reportedly waiting for the $4,500 psychological floor before re-entering the market in size ahead of the spring wedding and festival seasons.