On June 25, the global gold market experienced a significant downturn, with prices reaching their lowest point in seven months. The price of gold fell below $4,000 per ounce, closing at $3,998 after a drop of $111 during trading on June 24. At one point, prices dipped to $3,959, marking the lowest level since November 2025.

This decline is notable as it is the first time since late last year that gold has fallen below the crucial $4,000 mark. Market pressures are largely due to the strengthening US dollar and increasing investor expectations for interest rate hikes by the Federal Reserve (Fed).

The rise of the dollar, which has reached its highest level in 13 months, has made gold more expensive for buyers using other currencies. Additionally, statements from the Fed regarding tightening monetary policy during last week’s meeting have led investors to speculate about potential interest rate increases this year, particularly in light of inflationary pressures stemming from ongoing conflicts in the Middle East.

Analysts predict that the Fed may raise interest rates as early as September, which is exerting significant pressure on gold prices. Tai Wong, an independent precious metals investor in the US, stated, "The current support level for gold is below $3,900, and central banks are still buying. I believe the adjustment process will be prolonged as gold is no longer attractive at this moment."

Gold typically trends downward when interest rates rise since it does not offer fixed interest returns. Compared to its peak of $5,594 at the end of January, gold has lost nearly $1,600 in value.

Analysts at ING Bank in the Netherlands have revised their gold price forecasts for this year, now predicting an average of $4,300 for the third quarter and $4,600 for the fourth quarter, down from previous estimates of $4,850 and $5,000, respectively.

On June 25, the US is set to release the Personal Consumption Expenditures (PCE) index, which is the Fed's preferred measure of inflation. Lukman Otunuga, an analyst at FXTM, noted that if Fed officials make additional tightening statements or if economic data supports the forecast for interest rate hikes, gold prices could face further pressure.

In addition to gold, silver prices also fell, reaching $56.4 per ounce, the lowest since November 2025. Standard Chartered Bank has indicated that silver prices may be affected in the short term due to capital outflows from silver exchange-traded products (ETPs). However, with a lack of supply in the market, prices may recover in the coming months.