Gold fell below the $4000 an ounce mark in Wednesday trading as the dollar climbed amid rising speculation that the Federal Reserve will raise interest rates this year to combat inflation.
The Fed’s favorite inflation measure, the personal consumption expenditures price index, comes out Thursday with May data. Revised first-quarter GDP data comes out the same day. The indicators are expected to provide a better picture on how the Iran conflict affected costs of goods. Consumer sentiment data comes out Friday.
Investors are also awaiting resolution of U.S.-Iranian peace talks. The conflict there has caused oil prices to climb, spurring inflation, and gold prices to decline. Signs of an accord have been bullish for gold.
August gold futures dropped 1.3% Tuesday to settle at $4,149.40 an ounce on Comex, and the front-month contract declined 2.3% in the first two days of the week. Bullion is down 9.7% this month after dropping 0.8% in May and losing 1% in April. It rallied 64% last year. The August contract is currently down $109.0 (-2.65%) an ounce to $4039.60 and the DG spot price is $4039.20.
The dollar climbed to the highest level of the year early Wednesday, sending gold below $4,100 an ounce. A stronger dollar makes the precious metal more expensive for holders of other currencies, thereby pressuring prices.
The expectation of tighter monetary policy this year has comes as inflation climbed following the Iran war. At the start of the year, before the war, the central bank had been expected to loosen monetary policy. The Fed earlier this month held interest rates steady at 3.5% to 3.75%, as expected, but signaled growing support for a rate hike in 2026. Higher rates are typically bearish for gold, making it a less attractive investment than other assets.
Over 67% of investors tracked by the CME FedWatch Tool are betting on interest rates staying unchanged in July, though that percentage flips in September with 65% banking on the interest rates rising. The Fed has kept interest rates unchanged this year after three previous rate cuts.
Front-month silver futures lost 5.4% Tuesday to settle at $62.51 an ounce on Comex, and the September contract declined 6.4% in the first two days of the week. The most-active contract touched a record above $115 in January. Silver is down 18% this month after gaining 2.5% in May and losing 1.2% in April. It rose 141% last year. The September contract is currently down $2.989 (-4.78%) an ounce to $59.525 and the DG spot price is $59.50.
Spot palladium decreased 1.7% Tuesday to $1,243.00 an ounce and is down 3.9% this week. Palladium is down 8.9% this month after dropping 12% in May and rising 3.2% in April. Palladium rose 74% last year. Currently, the DG spot price is down $54.90 an ounce to $1190.00.
Spot platinum advanced 0.2% Tuesday to $1,675.40 an ounce, but is down 2.2% this week. Platinum is down 13% in June after dropping 3.2% in May and gaining 1.3% in April. Platinum increased 122% in 2025. The DG spot price is currently down $70.10 an ounce to $1603.90.
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