Gold hits year-to-date low near $3,880 as Fed hawks call for more hikes
Gold (XAU/USD) fell more than 3.3% on Friday to a year-to-date low of $3,880 after several Federal Reserve officials called for further rate hikes, pressuring the metal below key support.
The move pushed bullion through the $3,886 level that had held since October 28, 2025, and took prices below $3,900 for the first time since last October. XAU/USD last traded near $3,884.
Dallas Fed President Lorie Logan called for two additional rate increases, while St. Louis Fed President Alberto Musalem said another hike is needed soon, arguing current policy remains too loose. Richmond Fed President Thomas Barkin struck a more cautious tone, favoring a gradual approach even as he acknowledged broadening inflation pressures.
Despite the hawkish commentary, the US dollar did not extend gains and US Treasury yields eased slightly. US gross domestic product grew 3.4% year-on-year in the third quarter, well above expectations, while core PCE inflation held at 3.1% year-on-year, in line with forecasts but higher than September’s reading.
Even with stronger growth and sticky inflation, traders trimmed the odds of a December rate hike to 70%, down from about 84% earlier in the week, according to the CME FedWatch Tool. Gold also faced pressure from firmer energy prices, with WTI crude up 0.5% near $102 a barrel even as US-Iran talks continue.
Markets now turn to next week’s heavy US data calendar, including the ISM manufacturing and services PMIs, JOLTS job openings, ADP employment figures, weekly jobless claims and the October non-farm payrolls report.
Why it matters: A pullback in Fed rate-cut expectations alongside hawkish remarks from regional presidents tends to lift the dollar and Treasury yields, which weighs on non-yielding assets like gold. Moves in gold also ripple through silver and broader commodity markets sensitive to US rate expectations.
Source: FXStreet