Gold Falls to $4,235 as 4.2% US Inflation Fuels Rate-Hike Bets
Updated
Updated · Al Jazeera English · Jun 14
Gold Falls to $4,235 as 4.2% US Inflation Fuels Rate-Hike Bets
3 articles · Updated · Al Jazeera English · Jun 14
Summary
$4,235 per troy ounce on Friday left gold down sharply from its $5,303 January 28 peak, even though it closed slightly above the previous day on hopes of a US-Iran deal.
4.2% US inflation and a resilient labor market have pushed investors to expect higher-for-longer rates, with CME FedWatch now putting the chance of a Fed hike by December above 50%.
Iran’s disruption of Strait of Hormuz traffic since the late-February war has driven up oil and gas prices, feeding the inflation surge that is undermining gold’s usual safe-haven appeal.
A stronger dollar has added pressure because gold is a non-yielding asset priced in dollars, making it less attractive when interest rates rise and investors favor dollar returns.
Analysts say any war-ending relief could help gold by easing inflation expectations, but they still expect several months of headwinds to cap gains.
As a US-Iran deal nears, will central banks pivot from rate hikes and spark a major gold rally?
Has the global fight against inflation permanently shattered gold's reputation as the ultimate safe-haven asset?
How will the Hormuz crisis reshape global food supply chains, even if a peace deal is signed?
Gold’s 4.4% Crash in June 2026: Why Inflation and Geopolitical Turmoil Failed to Lift Prices
Overview
In June 2026, spot gold saw a sharp 4.40% drop to $4,067, its lowest since the previous November, before stabilizing slightly the next day. This sudden decline was mainly driven by unexpectedly high U.S. inflation data for May, which raised fears of aggressive interest rate hikes. As a result, investors found non-yielding assets like gold less attractive, despite gold’s usual role as a safe haven during inflation and uncertainty. The combination of rising inflation, concerns over higher interest rates, and gold’s lack of yield created a paradox, causing gold prices to fall even as economic risks increased.