Gold Slides Third Week Amid Fed Hawkishness

Gold Slides Third Week Amid Fed Hawkishness

Spot gold fell 0.7% to $4,181.86 per ounce by 22:12 ET (02:12 GMT) on Friday, putting the metal on track for a 0.8% weekly decline – the third consecutive weekly drop. August U.S. gold futures slipped 1.1% to $4,199.10.

The decline occurred despite the formal signing of an interim peace agreement between the United States and Iran, which had earlier buoyed bullion. The agreement is expected to reopen shipping through the Strait of Hormuz and has already driven a steep fall in oil prices, easing concerns about energy‑driven inflation.

Federal Reserve policy dominated market sentiment. The Fed left its policy rate unchanged at its June meeting, but comments from Chair Kevin Warsh were interpreted as decidedly hawkish, pushing Treasury yields higher and lifting the U.S. dollar to its strongest level in more than a year. The U.S. Dollar Index, after a 0.7% surge on Thursday to its highest since May 2025, was largely flat during Asian trading hours.

Nine of the Fed’s 19 policymakers now expect at least one rate increase later in 2026, and futures markets price in more than an 80% probability of a rate hike by year‑end, suggesting borrowing costs could remain elevated for longer.

Higher dollar strength makes dollar‑denominated gold more expensive for overseas buyers, while higher interest rates raise the opportunity cost of holding a non‑yielding asset such as gold.

Other precious metals also weakened: silver fell 1.6% to $64.70 per ounce and platinum slipped 1.3% to $1,677.51 per ounce. The DX index rose 0.11%, the GC (gold) index fell 1.64%, crude oil (CL) fell 0.65%, and the 10‑year Treasury yield (TNX) rose 0.79%.