Gold slipped below $4,000 as the dollar strengthened on hawkish Fed bets. Inflation above 4% in May boosted rate hike odds. OANDA's Wong sees correction extending toward $3,400.
Alpha Score of 47 reflects weak overall profile with poor momentum, weak value, strong quality, moderate sentiment.
Gold is on track for a fourth consecutive weekly loss, slipping below $4,000 an ounce for the first time since November 2025. Spot bullion traded at $3,991.49 by Friday's Asian session, down 0.9% on the day. US gold futures for August delivery lost 1% to $4,007.30.
The immediate weight is the dollar. The greenback held near its strongest level since May 2025, heading for a second straight weekly gain. A stronger dollar makes gold more expensive for holders of other currencies, draining buying power from the non-dollar bid.
“The rapid repricing of the hawkish Fed created a strong bullish momentum in the US dollar, which eventually led to this significant downward drift in gold prices,” said Kelvin Wong, senior market analyst at OANDA.
The trigger for that repricing was Thursday's inflation data. US inflation broke above 4% in May for the first time in three years, matching the median forecast in a Reuters poll of economists. Traders now see a 64% probability of a rate hike in September, according to the CME FedWatch Tool. Three total hikes are priced for this year.
Gold is often viewed as an inflation hedge. That logic works when rates are low or falling. In a rising-rate environment, the metal competes with yield-bearing assets. The non-yielding store of value tends to lose appeal. The 29% slide from the record high of $5,594.82 on January 29 reflects exactly that repricing.
Wong sees the multi-month correction extending toward $3,400 in the long term. The next catalyst for gold is the June CPI print on July 10 and the Fed's July meeting. If inflation eases, the September hike probability could fall, slowing the dollar's rally. That would give gold a chance to stabilise above $4,000. A hotter print would keep pressure on the metal.
Other precious metals followed gold lower. Spot silver fell 3.2% to $56.01 an ounce. Platinum lost 2.4% to $1,563.20. Palladium slid 1.6% to $1,165.93. All three were headed for a weekly loss.
For a deeper look at gold's price mechanics, see the gold profile. A related article on the same theme is available here.
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