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Gold Prices Rise, Investors Remain Wary of Fed Policy

World gold prices strengthened in trading on Friday (6/26/2026), driven by a weakening US dollar and a slight easing of expectations for a Fed rate hike.

However, the rally was not enough to erase the pressure that has pushed the precious metal toward its fourth consecutive weekly decline.

According to trading data, spot gold rose 0.51% to $4,046.70 per troy ounce. Meanwhile, US gold futures contracts for August delivery strengthened 0.35% to $4,061.40 per troy ounce.

Despite strengthening at the end of the week, gold prices still recorded a decline of about 2.6% for the week.

In fact, gold touched its lowest level in more than seven months at the start of the week due to pressure from expectations of still-tight US monetary policy.

The weakening US dollar was one of the factors supporting gold prices. The Uncle Sam's currency fell from its highs after the release of the Federal Reserve's preferred inflation data, the Personal Consumption Expenditures (PCE) index.

The data showed the US PCE index rose 4.1% year-over-year in May, in line with market expectations. After the data was released, market participants slightly reduced their bets on a Fed rate hike in September.

According to the CME Group's FedWatch Tool, the probability of a rate hike in September is now around 60%, down from 64% previously.

Market analyst at American Gold Exchange, Jim Wyckoff, said gold prices have begun to show a recovery after experiencing significant selling pressure at the start of the week.

However, gold's outlook remains overshadowed by the risk of high interest rate policy. Rate hikes and monetary tightening typically reduce gold's appeal as investors tend to shift to yield-bearing instruments such as bonds.

On the other hand, TD Securities assesses the potential for gold price gains is still limited. According to them, the inverse relationship between gold and the US dollar and oil prices makes the precious metal vulnerable to pressure if energy markets remain strong in the coming months.

On the physical demand side, the Indian market is showing signs of improvement.

Gold prices in the country are trading at a premium again for the first time in one and a half months after the price correction triggered buying interest. Conversely, demand in China, the world's largest gold consumer, remains relatively sluggish.

For other precious metals, silver rose 0.42% to $58.11 per troy ounce. Meanwhile, platinum strengthened 0.21% to $1,604.45 per troy ounce and palladium surged 1.25% to $1,199.25 per troy ounce.