Gold prices extended their losses on Thursday, remaining close to their lowest level in more than seven months.
A stronger U.S. dollar and growing expectations of further Federal Reserve interest-rate increases continued to weaken demand for the non-yielding precious metal.
Spot gold declined 0.5% to $3,978.60 per ounce by 02:25 ET. Meanwhile, U.S. gold futures fell 0.4% to $3,993.80 per ounce.
Gold Falls Below the $4,000 Level
Gold dropped below the key $4,000-per-ounce level on Wednesday for the first time since November 2025.
The metal has now lost almost 30% since reaching a record high of $5,595.46 per ounce in January.
The sharp decline reflects a major shift in market expectations as investors focus increasingly on the possibility of tighter U.S. monetary policy.
Stronger Dollar Pressures Gold Prices
The U.S. dollar remained close to a 13-month high following six consecutive sessions of gains.
The greenback has been supported by rising expectations that the Federal Reserve could increase interest rates again later this year.
According to CME FedWatch, markets are pricing in approximately a one-third probability of a July rate hike. The probability of monetary tightening by September stands at around 66%.
A stronger dollar makes gold more expensive for buyers using other currencies. Higher interest rates also increase the opportunity cost of holding bullion because gold does not pay interest or dividends.
Fed Outlook Replaces Safe-Haven Demand
ING analysts said gold’s recent weakness showed that investors had shifted their attention away from safe-haven demand.
Instead, markets are concentrating on the potential impact of higher interest rates, tighter financial conditions and persistent inflation.
This change in sentiment has reduced support for gold despite the metal’s strong performance earlier in the year.
Easing Geopolitical Risks Reduce Gold Premium
Progress in peace negotiations between the United States and Iran has also weakened demand for safe-haven assets.
Lower oil prices and easing geopolitical concerns have removed part of the risk premium that previously supported gold.
As fears of a wider conflict decline, investors appear less willing to hold bullion as protection against political and economic uncertainty.
Markets Await US PCE Inflation Data
Traders are now awaiting the latest U.S. Personal Consumption Expenditures price index.
The PCE index is the Federal Reserve’s preferred inflation measure. Therefore, the report could provide important clues about the future direction of U.S. interest rates.
A stronger-than-expected inflation reading could reinforce expectations of further monetary tightening and place additional pressure on gold prices.
Silver and Platinum Extend Losses
Silver prices fell 0.6% to $57.10 per ounce after dropping more than 6% during the previous session.
ING analysts said the silver market was still expected to remain in deficit. However, some of the metal’s strongest demand drivers were becoming less supportive.
Platinum declined 1.6% to $1,559.60 per ounce, following a 4.5% slide on Wednesday.
Copper Prices Edge Higher
Copper performed better than the precious metals market.
Benchmark copper futures on the London Metal Exchange rose 0.6% to $13,112.95 per tonne.
U.S. copper futures were broadly unchanged at approximately $5.97 per pound.
