Gold nears $4,100 as Fed tightening bets reshape rate outlook

COMEX gold rose to $4,016.68 an ounce, up 1% on the session, with the metal approaching the $4,100 threshold as competing macro forces converged.

"Heating up the trade war again will tank the dollar and be good for safe-havens," Tai Wong, an independent metals trader, said.

The rally followed former President Donald Trump's threat of new tariffs on Chinese imports, which pushed the US Dollar Index down 0.6% and reignited haven demand. Gold hit a session low of $3,944.43 before reversing higher. The Federal Reserve held its benchmark rate at 3.50%-3.75% at Chair Kevin Warsh's inaugural FOMC meeting on June 17, with the median projection rising to 3.75%-4% by year-end 2026. Core PCE inflation is projected at 3.6% for the full year, well above the 2% target, according to the Fed's Summary of Economic Projections.

The 10-year Treasury yield at 4.5% and the 30-year approaching 5% — levels not sustained in over a decade — create a competing pull for capital against non-yielding gold. The next upside marker beyond the record $4,059.35 is the psychological $4,100 round number, with $4,200 as the subsequent target. On the downside, a break below $3,819.42 would neutralize the near-term bullish bias.

Record High Within Reach

Gold's Friday close at $4,016.68 leaves the metal less than 1.1% from the all-time high of $4,059.35 set earlier this month. The main trend remains up as long as price holds above $3,888.43, according to technical analysis. The 50-day moving average at $3,592.82 provides the most reliable trend support, while minor pivot levels sit at $3,939.38 and $3,888.43. Traders are watching for a breakout above $4,059.35 to confirm a continuation toward $4,100 and beyond.

Central Banks and Geopolitics Underpin Demand

Central bank gold-buying continues to provide a structural bid under the market, while broader concerns about a US government shutdown and political instability in France are adding to risk-off flows. The metal's resilience in the face of rising real yields suggests the current rally is driven by factors beyond the traditional rate-gold correlation. By comparison, Bitcoin — often positioned as a digital alternative to gold — traded near $60,000, with the Bitcoin-to-gold ratio at 12, near long-term support. If geopolitical tensions escalate or Fed rate cut bets firm up further, gold could catch another strong bid, according to market participants.

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