Gold steadied near $4,000 an ounce after fluctuating around that level, having briefly dropped below it for the first time since November in Wednesday's session. This stabilization followed the release of US economic data, which led traders to slightly temper their expectations for imminent interest rate hikes.
A gauge of the dollar, which had seen earlier gains, erased them, and Treasury yields dipped on Thursday. This came after the US personal consumption expenditures price index fell short of monthly expectations, even though income and spending measures were stronger than forecast.
Analysts from ING had recently cut their gold forecasts, now anticipating prices to average $4,300 an ounce in Q3 2026 and $4,600 in Q4 2026, down from previous projections of $4,850 and $5,000, respectively. Similarly, Macquarie Group Ltd. reduced its Q3 and Q4 forecasts to $4,450 and $4,300 an ounce, citing the apparent end of a Middle East conflict and a more hawkish Federal Reserve as reasons for gold's fading safe-haven appeal.
The decline below $4,000 on Wednesday marked a significant dip for spot gold, which had peaked at a record high of $5,594.82 in late January, shedding over $1,500 an ounce since then. The firmer U.S. dollar, reaching a 13-month high on Wednesday, made dollar-priced bullion more expensive for international buyers, further contributing to the pressure on gold prices.
Despite the recent volatility, some analysts like Tai Wong, an independent metals trader, noted support for gold just under $3,900 and continued central bank purchases, suggesting a complete collapse is unlikely but anticipating a potentially long period of consolidation as the gold trade becomes less favored. This general sentiment reflects gold's diminished appeal when interest rates rise, as it offers no yield compared to alternatives like Treasuries.
