Gold prices remained under pressure on Friday and were on track for a fourth consecutive weekly decline. A resilient U.S. dollar and expectations of faster Fed rate hikes to control inflation continued to keep bullion below the $4,000 per ounce level.

Gold Falls Below $4,000 per Ounce

At the time of writing, spot gold fell 0.9% to $3,991.49 per ounce. Meanwhile, U.S. gold futures for August delivery dropped 1% to $4,007.30 per ounce.

For the week, gold was on track to lose around 4%, after falling below the key psychological level of $4,000 per ounce for the first time since November 2025.

Fed Rate-Hike Expectations Remain a Major Headwind

Data released on Thursday showed that U.S. inflation increased further in May, breaking above 4.0% for the first time in three years. This reinforced expectations that the Fed may continue raising interest rates to bring inflation under control.

Markets are now expecting three Fed rate hikes this year and are pricing in around a 64% chance of a September rate increase.

Although gold is often viewed as a hedge against inflation, it tends to lose appeal in a high-interest-rate environment because it does not generate yield.

Long-Term Correction Risk Remains

Gold prices have now fallen by around 29% from the record high of $5,594.82 per ounce, reached on January 29.

According to Kelvin Wong, the multi-month correction in gold could extend toward the $3,400 per ounce area in the long term if pressure from a strong U.S. dollar and Fed rate-hike expectations continues.

Other Precious Metals Also Decline

Gold was not the only precious metal under pressure.

Spot silver fell 3.2% to $56.01 per ounce. Platinum dropped 2.4% to $1,563.20 per ounce, while palladium slid 1.6% to $1,165.93 per ounce.

All major precious metals were headed for weekly losses.

Conclusion

Gold remains under clear pressure as the U.S. dollar strengthens and markets increase expectations that the Fed will continue raising interest rates. The loss of the $4,000 per ounce level shows that market sentiment remains cautious.

In the short term, gold’s direction will likely continue to depend on movements in the U.S. dollar, U.S. inflation data, and expectations around Fed monetary policy. If these factors remain unfavorable, downside pressure on gold could persist.

Source: Reuters