Gold Hits Over Seven-Month Low as Dollar Strengthens, Rate Hike Expectations Rise Gold prices continued their decline on Wednesday, reaching a more than seven-month low as the U.S. dollar strengthened and investor bets on potential interest rate hikes increased. The metal’s drop came amid conflicting signals surrounding U.S.-Iran peace talks, which have further complicated market sentiment. Spot gold fell 2.1% to $4,021.99 per ounce by 1405 GMT, hitting its lowest level since November 2025. U.S. gold futures also declined, dropping 2.6% to $4,039.30. The dollar’s rise made dollar-denominated gold more expensive for holders of other currencies, exacerbating the decline. Traders have intensified their bets on U.S. interest rate hikes this year, driven by the Federal Reserve’s hawkish stance at its latest policy meeting and lingering fears of inflationary pressures from the ongoing Iran conflict. Tai Wong, an independent metals trader, noted that market expectations now favor a rate hike as early as September. “A surging dollar at 13-month highs combined with lower inflation expectations are putting heavy pressure on precious metals,” Wong said. He added that while gold has support just below $3,900 and central bank purchases continue, the metal is likely to face a prolonged period of consolidation as it becomes less favored by investors. Gold’s appeal diminishes when interest rates rise because it does not offer yield, making it less attractive compared to higher-return assets. Since peaking at $5,594.82 in late January, spot gold has lost over $1,600 per ounce. ING analysts revised their gold forecasts, now predicting prices to average $4,300 in the third quarter of 2026 and $4,600 in the fourth quarter, down from their previous estimates of $4,850 and $5,000. Investors are closely watching the release of U.S.#federal_reserve #u_s_dollar #ing #tai_wong #lukman_otunuga
