Gold prices continued to fall in Thursday's trading session after falling to a seven-month low, as the USD continued to appreciate as the market increasingly bet on the possibility that the US will raise interest rates this year.
As of 3:35 PM Vietnam time, spot gold prices increased slightly by 0.18%, to 3,998.03 USD/ounce. Meanwhile, US gold futures for August delivery fell 0.3% to 3,996.50 USD/ounce.
In the trading session on Wednesday, gold prices fell below the $4,000/ounce mark for the first time since November 2025 and have now fallen by about 29% compared to the record high of $5,594.82/ounce set on January 29.
At the present time, gold is simply in a clear downward trend in the context of the USD maintaining its strength," said Matt Simpson - Senior Analyst at StoneX.
High inflation in the US, driven by the war between the US and Iran, along with the tough stance of the US Federal Reserve (Fed), has contributed to increasing expectations that the Fed will raise interest rates.
According to the CME FedWatch tool, traders are currently expecting the Fed to have three waves of interest rate hikes this year, while valuing about 67% of the possibility that the Fed will raise interest rates right in the September meeting.
Analysts believe that gold-backed ETFs may continue to record capital inflows if expectations of the Fed raising interest rates increase.
Although gold has long been seen as an inflation hedging tool, this precious metal has become less attractive in a high-interest rate environment because it does not bring yields.
Meanwhile, the USD continues to linger near its 13-month high, making gold more expensive for investors holding other currencies.
Investors are currently awaiting the release of the US Personal Consumption Expenditure (PCE) index – an inflation measure prioritized by the Fed – expected to be released later in the day, in order to seek further signals about monetary policy prospects.
In addition, the market is also continuing to monitor developments in the Middle East as Lebanon and Israel are discussing a US-backed proposal, under which Israeli forces will transfer part of the Lebanese territory occupied in the conflict with Hezbollah to the Lebanese army.
On the market for other precious metals, spot silver prices fell 1%, to 56.85 USD/ounce and platinum prices fell 1.4%, to 1,556.60 USD/ounce. Both fluctuated near the lowest level since November 2025. Meanwhile, palladium prices increased slightly by 0.5%, to 1,171.96 USD/ounce but remained near the nine-month low.
