Gold fell below $4,050 per ounce on Wednesday, June 24, as the U.S. dollar strengthened to a one-year high on rising expectations that the Federal Reserve will raise interest rates later this year, pressuring the precious metal that yields no return to investors.
Spot gold dropped to $4,046.16 per ounce as of 8:05 a.m. ET, according to the latest market data, extending losses that began after the Fed’s June 17 policy meeting signaled a more hawkish stance than markets had anticipated.
Higher interest rates increase the opportunity cost of holding gold, which generates no yield, making other assets more attractive to investors. When the Federal Reserve signals it may raise rates, the U.S. dollar typically strengthens because higher yields on dollar-denominated assets draw capital inflows. A stronger dollar, in turn, makes gold more expensive for holders of other currencies, creating a double headwind for bullion prices.
Nearly half of the Fed’s 19 policymakers indicated in last week’s meeting that they now expect rates to rise in 2026. According to the CME FedWatch Tool cited by CNBC, traders ratcheted up bets on a September rate hike to about 69%, up sharply from 29% just a week earlier. New Fed Chair Kevin Warsh reinforced this hawkish tilt during his post-meeting press conference, emphasizing price stability and signaling the central bank may not rush to cut rates even if growth weakens.
“The strength of the dollar, reinforced by last week’s hawkish tilt from the Fed, is creating a headwind for gold prices,” said Ricardo Evangelista, analyst at ActivTrades, in comments to CNBC. “Over the medium to long term, gold prices are likely to be driven primarily by monetary policy, with the Fed and the strength of the U.S. dollar remaining particularly significant factors.”
Gold has fallen over 3% since the Fed meeting last week, and the market is now testing a critical psychological support level at $4,000 per ounce. Standard Chartered analyst Suki Cooper noted that while the market had been looking to the $4,000 level for support following recent Iran peace talks that eased some geopolitical risk, sentiment has shifted to selling on price rallies.
The decline reflects a broader rotation away from precious metals as investors reassess the outlook for monetary policy. Silver fell 4.7% to $62.12 per ounce, platinum lost 2.6% to $1,634.85, and palladium slipped 2.4% to $1,235.06, all pressured by the stronger dollar and higher rate expectations.
Investors are watching the U.S. Personal Consumption Expenditures data—the Fed’s preferred inflation gauge—due later this week, for further signals on whether the central bank’s hawkish stance will persist. Deutsche Bank analyst Michael Hsueh revised his outlook downward, expecting gold to reach $4,800 per ounce in the fourth quarter under a base case of an indefinite Fed hold, but cautioning that a scenario pricing in 3-4 Fed hikes could push gold closer to $3,800 per ounce.
Sources
- CNBC — Gold prices, Fed rate expectations, dollar strength to one-year high, analyst Ricardo Evangelista commentary
- USA Today — Spot gold price at $4,046.16 per ounce on June 24, 2026
- FXStreet — Gold trading near two-week low, Fed rate hike bets, dollar at fresh high since May 2025, analyst context on Fed Chair Kevin Warsh and monetary policy
- Trading Economics — Gold fell to $4,041.92 per ounce on June 24, 2026
