International gold prices fell recently, with spot gold dropping below $4000 per ounce for the first time since November 2025, continuing a three-week decline [1, 2, 3]. Gold has lost about 27% of its value since peaking near $5600 per ounce in early 2026 [1, 4, 5].

The US dollar index strengthened to a 13-month high, making gold more expensive for holders of other currencies and putting downward pressure on prices [6, 1, 7, 8, 3, 2]. This was supported by the Federal Reserve maintaining its interest rates at 3.5%-3.75% in late June, but 9 of 19 Fed officials signaled possible further rate hikes this year, with the market pricing about a 70% chance of a September increase [7, 8, 3, 2, 9].

Higher yields on US government bonds have increased the opportunity cost of holding gold, which pays no interest, reducing its appeal to investors [1, 7, 8, 3, 2]. Goldman Sachs lowered its year-end 2026 gold price target by $500 to $4900 per ounce, citing a lower likelihood of Fed rate cuts, and raised the possibility of prices falling to $4400 if rate hikes continue [10, 7, 8, 3, 11, 9, 4]. As Goldman analyst Lina Thomas said, the outlook is cautiously optimistic for mid-to-long term but investors should expect short-term pressure and volatility [11].

Some analysts warn gold could drop below $4000 per ounce and enter a bear market due to persistent Fed hawkishness and a strong dollar. Jefferies’ Nikos Tzabouras commented, “Gold could fall below $4000 per ounce and further plunge into a bear market” [3, 2, 9, 4]. Conversely, other experts see support around $3900-$4000 and expect a prolonged consolidation rather than a crash. An independent metal trader noted that central bank gold buying continues and a crash is unlikely, though a drawn-out weak phase may persist [1, 5].

Geopolitical factors including the US-Iran 14-point peace memorandum signed on June 19 briefly boosted gold prices but also reduced its safe-haven demand [1, 7, 8, 3, 12]. Negotiations between the US and Iran resumed after a pause on June 22 amid ongoing uncertainty [12]. KCM Trade’s Tim Waterer said Fed Chair Kevin Walsh’s firm stance has overridden geopolitical boosts to gold, highlighting monetary policy as the dominant factor [8].

Last week, gold futures fell more than 1.7% intraday, while silver futures dropped over 2%, with related ETFs declining over 5%, reflecting broad weakness in precious metals [6, 7]. Silver prices have declined more sharply due to weakened financial and industrial demand [6, 1, 7, 8, 3, 2].

The immediate outlook hinges on Fed policies, with the September rate decision closely watched. The Fed’s signals and the strong dollar are likely to keep gold under pressure in the near term.