Gold Falls to 7-Month Low to Below $4,000
Gold prices fell sharply on Wednesday (June 24th) and briefly broke below the psychological level of $4,000 per troy ounce. Spot gold weakened around 3% to $3,985.30 per ounce after hitting its lowest level since November 2025. US gold futures also fell to the same level, indicating strong selling pressure in the precious metals market.
The main pressure came from the strengthening US dollar. When the dollar strengthens, gold becomes more expensive for buyers using other currencies. This weakens global demand for gold. At the same time, the US dollar is also near a 13-month high as markets grow increasingly confident that the Federal Reserve still has the potential to raise interest rates this year.
Expectations of an interest rate hike are a significant burden on gold. Following the hawkish tone of the last Fed meeting, market participants are starting to anticipate a greater chance of a rate hike, possibly as early as September. Higher interest rates make gold less attractive because the precious metal does not provide a yield, unlike government bonds, which do.
Metals market analyst Tai Wong believes the combination of a strong dollar, expectations of interest rate hikes, and a shift in inflation are putting increasing pressure on precious metals. He believes gold still has a support area below US$3,900, and central bank purchases remain supportive, so the chances of a deeper, extreme fall are slim. However, the market is likely to face a prolonged period of consolidation as interest in gold declines.
This correction in gold also signals that the previous major rally is losing steam. Gold hit a record high of US$5,594.82 in late January, but has now fallen more than US$1,600 per ounce from its peak. Several major institutions have begun to lower their gold price projections, including ING, which now estimates an average gold price of US$4,300 in the third quarter and US$4,600 in the fourth quarter of 2026, lower than its previous projections.
Looking ahead, market attention will be focused on US Personal Consumption Expenditures (PCE) inflation data, the Fed's favorite indicator. If the data shows that inflation remains strong, the likelihood of an interest rate hike could increase, and gold is at risk of falling back to the US$3,900 area. However, if inflation begins to subside, gold has the potential to withstand declines and attempt a technical rebound from its current low.
Source: Newsmaker.id
