Gold Near Seven-Month Low as Dollar Strength, Fed Bets Pressure Prices

Spot gold slipped 0.5% to $3,978.60 an ounce by 02:25 ET (06:25 GMT), while U.S. Gold Futures edged 0.4% lower to $3,993.80. Gold fell below the key $4,000-per-ounce level on Wednesday for the first time since November 2025 and has now declined nearly 30% from its January record high of $5,595.46 an ounce.

Dollar Strength and Fed Expectations Weigh on Bullion

The decline in gold comes as the U.S. dollar remains pinned at a 13-month high after six consecutive sessions of gains. The currency’s strength is being supported by increasing market expectations that the Federal Reserve may raise interest rates later this year.

According to CME FedWatch data cited in the report, markets are pricing in roughly a one-third probability of a rate hike in July and a 66% chance of tightening by September. A stronger dollar makes dollar-denominated gold more expensive for overseas buyers, while higher interest rates increase the opportunity cost of holding non-yielding assets such as bullion.

ING analysts noted that “Gold's weakness highlights the extent to which markets have shifted their focus from safe-haven demand towards the implications of higher interest rates and tighter financial conditions.”

Safe-Haven Reassessment and Broader Metals Moves

The latest slide in gold also reflects a reassessment of safe-haven demand. Easing geopolitical concerns amid progress in U.S.-Iran peace efforts, together with lower oil prices, have reduced some of the risk premium that had supported gold earlier in the year.

Traders are now awaiting U.S. Personal Consumption Expenditures (PCE) data, the Federal Reserve’s preferred inflation gauge, for further indications on the policy outlook.

Other precious metals also retreated. Silver prices fell 0.6% to $57.10 per ounce after dropping more than 6% in the previous session. ING analysts commented that, “While the silver market is expected to remain in deficit, some of the strongest demand drivers are becoming less supportive.” Platinum slipped 1.6% to $1,559.60 an ounce, following a 4.5% decline on Wednesday.

In base metals, Benchmark Copper Futures on the London Metal Exchange edged up 0.6% to $13,112.95 a ton, while U.S. Copper Futures were flat at $5.97 a pound.

FAQ

Why are gold prices falling now?
Gold prices are declining due to a stronger U.S. dollar, rising expectations of Federal Reserve interest rate hikes, and a reduced safe-haven premium as geopolitical concerns ease and oil prices fall.

How far has gold dropped from its recent peak?
Gold has fallen nearly 30% from its January record high of $5,595.46 an ounce, recently trading below $4,000 per ounce for the first time since November 2025.

What are markets expecting from the Federal Reserve?
Futures pricing indicates roughly a one-third chance of a rate hike in July and a 66% probability of additional tightening by September.

How are other precious metals and copper performing?
Silver is down 0.6% to $57.10 per ounce after a drop of more than 6% in the previous session, and platinum is 1.6% lower at $1,559.60 an ounce. Benchmark copper on the London Metal Exchange is up 0.6% to $13,112.95 a ton, while U.S. Copper Futures are flat at $5.97 a pound.