Spot gold fell 1.5% to $4,392.57 an ounce on Wednesday, its lowest level in roughly two months. The decline was triggered by stronger-than-expected US economic data, which pushed the dollar higher and reinforced expectations that the Federal Reserve will keep interest rates elevated for longer.
Higher rates increase the opportunity cost of holding non-yielding gold, while a stronger dollar makes the metal more expensive for international buyers. Both forces worked against gold on Wednesday.
Gold hit an all-time high above $5,500 in late January 2026, driven by aggressive central bank buying and escalating US-Iran tensions. Since then, the metal has corrected roughly 20%. Even at current levels, gold remains up over 30% year-over-year.
Central banks continue to accumulate gold at historically high rates, diversifying away from dollar-denominated assets. Geopolitical uncertainty, especially in the Middle East, provides a demand floor. Investors are now watching Fed commentary and upcoming economic data for clues on the rate path.