Gold slips below $4,000 as higher rates pressure bullion

Gold slipped below $4,000 an ounce, a level that had become a psychological floor, as traders re-priced the outlook for inflation, interest rates and safe-haven demand.

Spot gold touched $3,981.21 an ounce in New York trade, while U.S. gold futures settled at $4,008.80. Silver also sold off, falling 4.8% to $59.08 an ounce after hitting its lowest level since December 2025. The dollar reached 13-month highs, adding pressure across metals as investors weighed conflicting signals on U.S.-Iran peace talks and waited for Thursday’s U.S. personal consumption expenditures inflation data, the Federal Reserve’s preferred gauge.

Gold has fallen more than $1,500 from its late-January record peak of $5,594.82. World Gold Council data for the first quarter showed average LBMA gold prices at a record $4,873 an ounce and a brief peak of $5,405 in January before correcting.

The Federal Reserve kept its target range unchanged at 3.50% to 3.75% at its June 16-17 meeting. The statement described economic activity as expanding at a solid pace even as uncertainty remained elevated, including risks tied in part to conflict in the Middle East. Traders have since increased bets that rates could rise later this year.

World Gold Council data for the first quarter showed total demand of 1,231 tonnes, up 2% from a year earlier, with demand value at a record US$193 billion. Bar-and-coin demand jumped 42% to 474 tonnes, central banks bought 244 tonnes on a net basis, and jewellery volumes fell 23% to 300 tonnes. Spending on jewellery rose 31%.

Tai Wong, an independent metals trader, expects support just under $3,900 and central-bank buying to limit the chance of a deeper break. He expects gold could spend a long time consolidating after moving out of favor. Lukman Otunuga, senior research analyst at FXTM, sees further hawkish signals from Fed officials or economic data that supports higher rates as a source of downside risk.

ING cut its forecasts as well.