Gold slides under $4,000 amid strong dollar Fed rate outlook

Gold prices fell to a more than seven-month low on Thursday, dropping below the key psychological level of $4,000 per ounce for the first time since November 2025. The decline reflects a sustained sell-off driven by a stronger U.S. dollar and heightened expectations that the Federal Reserve will maintain higher interest rates.

Spot gold traded near $3,982 per ounce, extending losses from a record high reached in late January. The U.S. dollar index hit its strongest level in over 13 months, making dollar-priced bullion more expensive for international buyers. Concurrently, rising U.S. Treasury yields have increased the opportunity cost of holding non-yielding assets like gold. Market data indicated traders see a roughly two-thirds chance of a Fed rate hike in September.

Analysts said the primary driver remains the central bank's hawkish policy stance, which has led to a broad repricing of rate expectations. The metal has declined more than 6% since the Fed's meeting last week and is down over 28% from its January peak. Investor attention is now focused on the upcoming release of the U.S. Personal Consumption Expenditures (PCE) price index, the Fed's preferred inflation gauge, for...