Key Takeaways:
- Spot gold fell to $3,977.21/oz, its lowest since November 2025
- Hong Kong-listed gold miners plunged 6 percent to 9 percent in broad sell-off
- U.S. PCE data due Thursday is the next catalyst for direction
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Gold sinks below $4,000/oz as dollar strength, rate hike bets mount
COMEX gold fell below $4,000/oz for the first time since November, dropping 2.5 percent to $4,006.29 on Wednesday and extending losses to $3,977.21 in Asian trading Thursday.
"The market pricing a rate hike as soon as September due to a hawkish Fed, a surging dollar at 13-month highs combined with lower inflation expectations are putting heavy pressure on precious metals," Tai Wong, an independent metals trader, said.
The sell-off wiped out more than $1,500/oz from gold's record peak of $5,594.82 set in late January. Silver tumbled 5 percent to $58.96, while platinum lost 4 percent to $1,586.55 and palladium dropped 5.2 percent to $1,173.23. ING cut its gold forecasts, now expecting Q3 2026 prices to average $4,300/oz and Q4 at $4,600/oz, down from prior estimates of $4,850 and $5,000, respectively.
The breach of the $4,000 psychological level opens the door to further downside, with support near $3,900, according to Wong. The U.S. May PCE data — the Fed's preferred inflation gauge — due Thursday will determine whether the sell-off deepens or triggers a reversal.
Dollar Strength Pressures Precious Metals Complex
The U.S. dollar firmed to 13-month highs, making dollar-priced bullion more expensive for holders of other currencies. Traders have ramped up bets on U.S. interest rate hikes after the Federal Reserve struck a hawkish tone at its June policy meeting — the first under Chair Kevin Warsh — and as inflationary fears from the Iran war persist. CME Group's FedWatch tool shows traders pricing in at least one rate hike by year-end.
Gold becomes less attractive to investors when interest rates rise because it offers no yield. The metal is now down almost 30 percent from its January peak, while silver has shed more than 50 percent from a high of roughly $122.
Hong Kong Gold Miners Routed
The price collapse triggered a broad sell-off in Hong Kong-listed gold miners. Zijin Mining (02899.HK) slumped 6.5 percent to HKD27.52, a near 10-month low. Zhaojin Mining (01818.HK) dropped 8.5 percent to HKD16.69, its lowest in more than a year. At least seven other miners fell 6 percent to 9 percent, including SD Gold (01787.HK) down 8.1 percent, ChinaGoldIntl (02099.HK) down 8.6 percent, and Wanguo Gold (03939.HK) down 7.8 percent.
More hawkish signals from Fed officials or economic data supporting the case for higher rates may translate to further downside risk for gold, said Lukman Otunuga, senior research analyst at FXTM. Conversely, a softer PCE print could trigger a sharp reversal, with the $4,000 level becoming new resistance.
This article is for informational purposes only and does not constitute investment advice.
[1] Gold Busts Below USD4,000 as Gold Miners Under Broad Pressure; ZIJIN MINING Slumps 6%+[2] Gold hits over seven-month low as dollar firms, rate hike bets rise - Reuters[3] Gold falls below $4,000/oz on strong dollar, hawkish Fed signals[4] Gold drops below key $4,000 level as dollar firms, rate hike bets rise[5] The Price of Gold Sinks Under $4,000 for the First Time Since November
