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Gold Prices Rise, Investors Still Wary of Fed Policy
World gold prices strengthened in trading on Friday (June 26, 2026), driven by a weakening US dollar and a slight easing of expectations for a Fed interest rate hike.
However, the rally was not enough to erase the pressure that has pushed the precious metal toward a fourth consecutive weekly decline.
Based on trading data, spot gold rose 0.51% to $4,046.70 per troy ounce. Meanwhile, US gold futures for August delivery gained 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 early in the week due to pressure from still-tight US monetary policy expectations.
The weakening US dollar was one of the factors supporting gold prices. The greenback fell from its highs after the release of the Federal Reserve's preferred inflation gauge, the Personal Consumption Expenditures (PCE) index.
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 bets on a Fed rate hike in September.
Based on the CME Group's FedWatch Tool, the probability of a rate hike in September now stands at around 60%, down from 64% previously.
Market analyst from American Gold Exchange, Jim Wyckoff, said gold prices are starting to show a recovery after experiencing significant selling pressure earlier in 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 believes the potential for gold price gains remains limited. According to them, the inverse relationship between gold and the US dollar, as well as oil prices, makes the precious metal vulnerable to pressure if energy markets remain strong in the coming months.
From the physical demand side, the Indian market shows signs of improvement.
Gold prices in the country are trading at a premium again for the first time in a month and a half after price corrections spurred 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 gained 0.21% to $1,604.45 per troy ounce, and palladium jumped 1.25% to $1,199.25 per troy ounce.