Gold steadies after sharp monthly slide as dollar strength, Fed outlook weigh

Gold holds near session highs but heads for steep weekly, monthly losses

Spot gold ticked up 0.3% to $4,036.88 an ounce by 05:18 ET (09:18 GMT), while U.S. Gold Futures added 0.1% to $4,051.30. Despite Friday’s modest gains, bullion was on track for a nearly 3% weekly loss and has declined roughly 11% so far this month, marking a sustained period of weakness over three consecutive weeks.

The U.S. dollar remained steady near a 13‑month high and was set for a second straight weekly advance. A stronger dollar makes gold more expensive for holders of other currencies, reducing its attractiveness and contributing to the negative performance in recent weeks.

Fed rate expectations and inflation data pressure bullion

The greenback’s strength has been supported by rising expectations that the Federal Reserve may need to tighten monetary policy further as inflation remains elevated. Data released on Thursday showed the U.S. personal consumption expenditures (PCE) price index, the Fed’s preferred inflation gauge, rose 4.1% in May from a year earlier. This was the highest reading in more than three years and the first above 4% since 2023.

According to the CME FedWatch tool, markets currently see a 63% probability of a Fed rate increase by September. Higher interest rates typically reduce the appeal of non-yielding assets such as gold, as investors can obtain better returns from interest-bearing instruments.

Geopolitical risk offers limited support; broader metals complex under pressure

Losses in gold were partly limited as investors monitored developments in the Middle East. A cargo vessel reported an attack near the Strait of Hormuz, underscoring lingering geopolitical risks despite a preliminary U.S.-Iran peace agreement. The incident briefly revived safe-haven demand for bullion but did not reverse the overall downward trend driven by monetary and currency factors.

Among other precious metals, silver prices edged up 0.1% to $57.96 per ounce but were heading for a 12% weekly drop. Platinum rose 1% to $1,618.23 per ounce, yet remained on course for its seventh straight weekly loss, highlighting continued weakness across the precious metals segment.

In base metals trading, Benchmark Copper Futures on the London Metal Exchange fell 0.4% to $13,249.33 a ton, while U.S. Copper Futures slipped 0.2% to $6.06 a pound, extending the generally softer tone across industrial commodities.

FAQ

What are current spot and futures gold prices?
Spot gold is trading at $4,036.88 an ounce, while U.S. Gold Futures are at $4,051.30.

How much has gold declined recently?
Gold is on track for a nearly 3% weekly loss and has fallen roughly 11% this month.

What is driving expectations of further Fed rate hikes?
Expectations are being supported by elevated U.S. inflation, with the PCE price index rising 4.1% year-on-year in May, the highest in more than three years.

How are other metals performing?
Silver is up 0.1% at $57.96 per ounce but facing a 12% weekly drop, platinum is up 1% at $1,618.23 per ounce yet heading for a seventh straight weekly loss, and copper futures are down 0.4% on the LME and 0.2% in the U.S.