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Gold Prices Rise, Investors Still Wary of Fed Policy
World gold prices strengthened in trading on Friday (6/26/2026), driven by a weakening US dollar and slightly easing expectations of a Fed rate hike.
However, this strengthening was not enough to erase the pressure that has pushed the precious metal toward its fourth consecutive weekly decline.
Based on trading data, spot gold rose 0.51% to US$ 4,046.70 per troy ounce. Meanwhile, US gold futures for August delivery strengthened 0.35% to US$ 4,061.40 per troy ounce.
Despite the end-of-week gain, 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 expectations of still-tight US monetary policy.
The weakening US dollar is 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.
Data showed the US PCE index rose 4.1% year-on-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 now stands at around 60%, down from 64% previously.
Market analyst at 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 clouded by risks from 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 sees limited upside potential for gold prices. 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 the last month and a half 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 US$ 58.11 per troy ounce. Meanwhile, platinum strengthened 0.21% to US$ 1,604.45 per troy ounce and palladium jumped 1.25% to US$ 1,199.25 per troy ounce.