Gold extended losses early Friday in reaction to Wednesday’s hawkish Fed comments. The yellow metal is headed for the third weekly loss as the dollar firmed.
The dollar has strengthened on increased anticipation of a U.S. interest rate increase before the end of the year, making gold and other metals a more expensive investment to holders of other currencies. The Federal Reserve on Wednesday 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.
The expectation of tighter monetary policy this year comes as inflation has climbed following the Iran war, which drove up prices of oil and many goods. At the start of the year, before the war, the central bank had been expected to loosen monetary policy. Still, the news of the preliminary peace accord this week briefly caused gold prices to rise in anticipation of lower prices for oil and other assets.
August gold futures tumbled 3.1% Thursday to settle at $4,245.90 an ounce on Comex, though the most-active contract rose 0.2% this week. Bullion dropped 0.8% in May after losing 1% in April and sliding 11% in March. It rallied 64% last year. The August contract is currently down $63.90 (-1.50%) an ounce to $4182.00 and the DG spot price is $4161.00.
U.S. government offices and financial markets are closed Friday for the Juneteenth holiday, and electronic trades on Comex will post for settlement on Monday.
The signing of the U.S.-Iran memorandum of understanding started the clock ticking on 60 days of negotiations to come up with a final agreement. The initial deal reopens the Strait of Hormuz, the critical waterway for oil shipments from the Persian Gulf. It leaves unsolved issues including details about Iran’s nuclear program.
In part because of the war, U.S. annual inflation, as measured by the consumer price index, rose to the highest level in more than three years in May data released last week. If that starts to slow, it would reduce pressure on the Fed to tighten monetary policy.
Most investors tracked by the CME FedWatch Tool are now betting on interest rates staying unchanged in July, though they see an increase before the end of the year. The Fed has kept interest rates unchanged this year after three previous rate cuts.
Front-month silver futures, which rolled to September from July this week, lost 1.7% for the week to settle at $66.80 an ounce on Comex after the September contract fell 6.3% Thursday. The most-active contract touched a record above $115 in January. Silver gained 2.5% in May after losing 1.2% in April and dropping 20% in March. It rose 141% last year. The September contract is currently down $1.268 (-1.90%) an ounce to $65.535 and the DG spot price is $65.01.
Spot palladium gained 0.5% this week to $1,293.00 an ounce, though it dropped 5.2% Thursday. Palladium fell 12% last month after rising 3.2% in April and tumbling 17% in March. Palladium rose 74% last year. Currently, the DG spot price is down $37.60 an ounce to $1249.50.
Spot platinum advanced 0.4% for the week to $1,712.90 an ounce, though it decreased 4.8% Thursday. Platinum dropped 3.2% in May after gaining 1.3% in April and declining 17% in March. Platinum increased 122% in 2025. The DG spot price is currently down $46.10 an ounce to $1667.20.
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