Gold Prices Slip Below Crucial $4,000 Mark as Strong US Dollar Pressures Bullion
Gold prices extended losses on Thursday, staying below the key $4,000-per-ounce threshold for the first time in seven months. The slump is driven by a firm U.S. dollar and mounting market expectations that the Federal Reserve will raise interest rates this year to combat inflation. While gold traditionally acts as an inflation hedge, its appeal as a non-yielding asset is being heavily pressured by the high-interest-rate environment as traders await upcoming U.S. inflation data.
- Republic Business
- 2 min read
Gold extended losses on Thursday, after breaking below the key $4,000-per-ounce level for the first time in seven months a day earlier, as the dollar held strong on rising expectations of Federal Reserve interest rate hikes this year.
Spot gold was down 0.7% at $3,971.08 per ounce, as of 0311 GMT. U.S. gold futures for August delivery lost 0.5% to $3,987.
Bullion fell below the $4,000 level for the first time since November 2025 on Wednesday, and is down 29% from a record high of $5,594.82 reached on January 29, weighed down by rising bets on U.S. rate hikes this year to tackle high inflation fuelled by the Iran war.
Traders expect three Fed rate hikes this year and are pricing in an about 67% chance of a September increase, according to the CME FedWatch Tool.
Bullion-backed exchange-traded funds could face renewed outflows if expectations rise for rate hikes, analysts say.
While gold is traditionally seen as an inflation hedge, it loses its appeal as a non-yielding asset in a high-interest-rate environment.
"Gold is simply in a bearish momentum trade at this point amid a strong U.S. dollar environment," said Matt Simpson, a senior analyst at StoneX.
The dollar held firm near a 13-month high, making gold more expensive for buyers holding other currencies.
Investors now await the U.S. Personal Consumption Expenditures data, the Fed's preferred inflation gauge, due later in the day, for further cues on monetary policy.
Investors also kept a close eye on the Middle East as Lebanon and Israel discussed a U.S.-backed proposal for Israeli forces to transfer some of the Lebanese territory invaded in their war with Hezbollah to Lebanon's military.
Spot silver fell 1.4% to $56.61 per ounce and platinum lost 1.1% to $1,560.60, both hovering near their lowest levels since November 2025. Palladium inched 0.1% lower to $1,165.63 and was near a nine-month low.
Published By : Shourya Jha
Published On: 25 June 2026 at 10:55 IST