Gold prices continued to fall in Friday's trading session and are heading towards their fourth consecutive week of decline, as the USD maintains its strength and expectations that the US Federal Reserve (Fed) will accelerate the roadmap to raise interest rates to curb inflation continue to put pressure on the precious metal, keeping prices fluctuating around the psychological threshold of 4,000 USD/ounce.
As of 2:16 PM Vietnam time, spot gold prices fell 0.05%, to 4,030.40 USD/ounce. Meanwhile, US gold futures for August delivery fell 0.07%, to 4,044.80 USD/ounce.
Overall for the week, gold prices are heading towards a decrease of about 3.6%, after falling below the 4,000 USD/ounce mark for the first time since November 2025 in Wednesday's trading session.
Mr. Kelvin Wong - Senior Market Analyst at OANDA - said that the market's rapid adjustment of expectations following the Fed's tough stance has created a strong upward momentum for the USD, thereby pulling gold prices down sharply.
The market's rapid revaluation of the Fed's monetary policy outlook in a tough direction has created a strong upward momentum for the USD and ultimately led to a significant drop in gold prices," he said.
The USD Index is also heading for its second consecutive week of gains, making gold more expensive for investors holding other currencies.
According to Mr. Wong, the months-long correction of gold since hitting a historic peak at the end of January has not ended and in the long term the price may fall back to the $3,400/ounce area.
Since the record level of 5,594.82 USD/ounce set on January 29, gold prices have now fallen by about 29%, as inflation increases due to the war between the US and Iran, raising expectations that the Fed will continue to raise interest rates.
Data released on Thursday showed that inflation in the US continued to rise in May and exceeded the 4% mark for the first time in three years, as predicted by economic experts surveyed by Reuters.
Although gold is often seen as an inflation hedging tool, this precious metal becomes less attractive in a high interest rate environment because it does not yield yields.
According to the CME FedWatch tool, the market currently expects the Fed to raise interest rates three times this year, and assesses about 64% of the possibility that the US central bank will raise interest rates right in the September meeting.
On the precious metals market, spot silver prices increased slightly by 0.13% to 57.99 USD/ounce. Platinum prices increased by 0.45% to 1,610.02 USD/ounce, while palladium increased by 1.18% to 1,200,000 USD/ounce. All three metals are heading towards a week of price adjustment.
