Gold extends weekly losing streak, raising risk of sub-$4,000 test

Gold fell to $4,226.49 per ounce on COMEX, down 2.6% this week, as the Federal Reserve's hawkish pivot strengthened the dollar and eroded bullion's investment appeal. The metal has declined 7.7% in the past month and sits 22.8% below its January 52-week high of $5,477.79.

"The Fed's hawkish stance has neutralized the geopolitical tailwind that briefly supported gold after the Hormuz reopening," Bloomberg reported, citing the central bank's updated projections showing nine of 19 policymakers expect a rate increase by year-end. Markets now price an 85% chance of a December hike, up from 61% before the Fed's policy statement, according to the CME FedWatch Tool.

The dollar index rose to 100.81, its highest since May 2025, making dollar-denominated gold more expensive for overseas buyers. COMEX August gold futures dropped 2.3% to $4,147.15 per ounce, while silver slipped 4.3% to $63.47 per ounce, according to exchange data. The Relative Strength Index hovered near 36, reflecting weak demand, with the 200-day exponential moving average at $4,398.58 acting as the first meaningful resistance.

A sustained break below $4,200 could open the path toward the June 11 swing low at $4,023, approaching the $4,000 psychological level. The next catalyst is the US Core PCE inflation release on June 26, which will shape expectations for the Fed's July meeting.

Goldman Sachs Trims Year-End Target to $4,900

Goldman Sachs lowered its year-end gold target to $4,900 per ounce from $5,400, citing expectations that the Fed will not cut rates in 2026. The bank argued that while geopolitical risks remain, the overriding factor is the central bank's determination to keep inflation in check. Barclays maintained its 2026 and 2027 forecasts at $4,791 and $4,900 per ounce, respectively, saying structural drivers including persistent inflation, policy uncertainty and central bank demand remain intact. Barclays estimated gold's fair value at $4,150 per ounce and recommended exposure to mining stocks including Newmont and Agnico Eagle.

Technical Levels Point to Further Downside

Gold at $4,226.49 is trading 22.8% below its 52-week high but remains 29.4% above its 52-week low of $3,267.56. The 200-day EMA at $4,398.58 is the first resistance level bulls need to reclaim, while a daily close below $4,200 would confirm the bearish bias, according to FXStreet technical analysis. The MACD indicator remains in negative territory, with the line below its signal, suggesting ongoing downside pressure. Gold's 26% decline during the Iran conflict came from a boost to the dollar, yields and equities that overwhelmed the metal's safe-haven appeal, Barclays said, but those factors are temporary.

This article is for informational purposes only and does not constitute investment advice.