Key Takeaways

• Gold extends losing streak: Spot gold fell 0.5% to $4,090.72 per ounce after touching as low as $4,050.60 — approaching the critical $4,000 psychological level.
• Gold futures drop 1%: To $4,109.50 per ounce.
• Five losses in six sessions: Bullion is now suffering through three straight weekly declines.
• Dollar hits fresh 13-month high: The DXY climbed to another new peak as rate hike bets intensify.
• September hike at 70%: Markets are pricing a roughly 70% probability of Fed tightening by September.
• December hike fully priced: A second increase by year-end is now completely priced in by markets.
• Middle East supply fears ease: Ongoing U.S.-Iran diplomatic progress and Hormuz normalization continue to reduce the energy-driven inflation premium in gold.
• Key sticking points remain: Nuclear inspections and access to frozen Iranian funds are unresolved issues in the peace framework.
• Analysts’ verdict: “Gold is likely to trade in line with Fed expectations, leaving prices vulnerable to higher yields and a stronger dollar in the near term.”
• PCE data Thursday: The Fed’s preferred inflation gauge is the week’s pivotal release for rate path expectations.
• Silver rebounds modestly: Spot silver edged up 0.5% to $61.92 per ounce after Tuesday’s 5%+ crash.
• Platinum flat: At $1,653.88 per ounce.
• Copper edges higher: LME copper gained 0.4% to $13,433.88 per ton; U.S. copper futures rose 0.3%.

Gold prices extended losses on Wednesday, reaching near two-week lows and testing the psychologically important $4,000-per-ounce level, as a stronger U.S. dollar and rising expectations of Federal Reserve rate hikes reduced the appeal of the non-yielding metal.

Spot gold fell 0.5% to $4,090.72 an ounce by 02:41 ET (06:41 GMT), after reaching as low as $4,050.60 in early trade. U.S. gold futures dropped 1% to $4,109.50.

Bullion has now declined in five out of the last six sessions and is coming off three straight weekly losses.

Dollar at 13-Month High as Rate Bets Accelerate

The DXY climbed to a fresh 13-month high on Wednesday as markets increased bets that the Fed could raise interest rates as soon as July — and again later this year. A stronger dollar makes gold more expensive for holders of other currencies, while higher interest rates increase the opportunity cost of holding bullion.

Traders now see a substantially higher probability of Fed tightening in the coming months following last week’s policy meeting and hawkish commentary from officials.

Markets are pricing in a roughly 70% probability of a hike by September and have fully priced in another increase by December.

Iran Progress Eases Inflation Safe-Haven Case

Gold also came under pressure as concerns over Middle East supply disruptions continued to ease.

Investors monitored ongoing U.S.-Iran diplomatic efforts after both sides signaled progress toward implementing a broader peace framework that would help normalize energy flows through the Strait of Hormuz.

However, uncertainty remained over key issues, including nuclear inspections and access to frozen Iranian funds.

“While geopolitical risks remain elevated, gold is likely to trade in line with Fed expectations, leaving prices vulnerable to higher yields and a stronger dollar in the near term,” analysts said.

Market participants are now awaiting U.S. Personal Consumption Expenditures inflation data due on Thursday for further clues on the Fed’s policy path.

Among other precious metals, silver prices edged up 0.5% to $61.92 per ounce after declining more than 5% in the previous session. Platinum traded flat at $1,653.88 per ounce.

Benchmark copper futures on the London Metal Exchange edged up 0.4% to $13,433.88 a ton, while U.S. copper futures gained 0.3% to $6.14 a pound.