The U.S. Dollar Index bounced to 97.801, recovering from a post-Fed low not seen since early 2022. The greenback was lifted by stronger-than-expected jobless claims data and a cautious tone from Fed Chair Jerome Powell, who described the cut as a risk-management move rather than the start of an aggressive easing cycle.

Despite the cut, the lack of a strong dovish commitment disappointed traders betting on deeper policy easing. Still, the futures market is pricing in nearly a 90% chance of another cut at the Fed’s next meeting, suggesting dollar gains may be capped.

Citi Hikes Gold Forecast to $3800 on Fiscal, Structural Risks

Citi upgraded its three-month gold price forecast to $3800 from $3600, citing a mix of cyclical and structural drivers. The bank flagged U.S. labor market weakness, rising fiscal deficits, and questions about the Fed’s independence as key factors supporting higher gold prices.

In a more extreme scenario—marked by stagflation or a hard landing—Citi believes gold could spike to $4000, though they also note a downside risk to $3400 if global growth fears ease and policy normalization resumes.