Market Overview
Investing.com reported that gold prices ticked up more than 1% on Friday but closed the week with losses, as a stronger U.S. dollar driven by heightened Federal Reserve rate‑hike expectations outweighed easing inflationary concerns from sliding oil prices.
Gold Price Movement
Spot gold increased 1.6% on the day to settle at $4,090.26 per ounce, while gold futures rose 1.4% to $4,103.00 per ounce. Despite the daily gains, spot gold posted a weekly decline of 1.7%, extending a four‑week losing streak, and gold futures fell 3.3% for the week.
Inflation Data and Fed Outlook
The U.S. May core personal consumption expenditures (PCE) price index, the Federal Reserve’s preferred inflation gauge, edged up to 3.4% year‑over‑year, the highest reading since October 2023. Headline PCE also rose on both a month‑over‑month and year‑over‑year basis, with the year‑over‑year increase marking its strongest since April 2023. The data led market participants to slightly trim expectations for additional Fed rate hikes this year while modestly increasing the probability that the Fed will keep rates steady, based on the view that the May PCE report may represent a peak in price pressures.
Earlier, the Fed released a more hawkish dot‑plot than anticipated, with at least half of the Federal Open Market Committee members now expecting rate hikes in 2026. Higher‑rate expectations typically depress non‑yielding assets such as gold and bolster the dollar, making gold less attractive to foreign buyers.
Precious Metals and Oil
Higher rate‑hike bets also weighed on other precious metals. Spot silver slumped about 9%, and platinum fell 2.3% during the week. Crude oil (LCO) prices declined 2.62%, contributing to reduced inflationary pressure.
Analyst Commentary
David Morrison, senior market analyst at Trade Nation, observed that gold fell below $4,000 per ounce on Wednesday, its lowest level since early November of the previous year, before rebounding modestly above $4,050. He noted that a pullback in the U.S. dollar after the inflation data provided some support for gold, but cautioned that “the bulls will now be hoping that the area around $4,000 now acts as support,” adding that “it may be too early to sound the ‘all clear.’”
Geopolitical Note
President Donald Trump accused Iran of violating a cease‑fire agreement by shooting at least four drones at ships in the Strait of Hormuz and hitting a cargo vessel. The vessel, identified by the Wall Street Journal as the Singapore‑flagged Ever Lovely, was reportedly attacked by Iran’s Islamic Revolutionary Guard Corps. Despite the claim, oil prices continued to slide, as overall shipping traffic through the strait remained resilient.