Analysts suggest that the market is currently anticipating the Federal Reserve could raise interest rates as soon as September, driving the US dollar index to a 13-month high. These factors are exerting significant pressure on the precious metals market.
On June 26th, the spot price of gold saw its intraday losses widen to 1%, trading at $3,985.78 per ounce. Spot silver fell below $56 per ounce, down 3.18% for the day. New York silver futures dropped 4% intraday, currently trading at $56.45 per ounce.
Analysts believe that the market's current expectation of a potential Fed rate hike as early as September, which has propelled the dollar index to a 13-month peak, is placing heavy pressure on the precious metals sector.
Lindsay Rosner, Head of Multi-Sector Investing in Asset and Wealth Management at Goldman Sachs, issued a fresh warning, stating there is a "significant possibility" of a Federal Reserve rate hike in July, with a 50% probability.
In a recent interview, she pointed out that upcoming inflation data, particularly the Personal Consumption Expenditures report, are key factors that could prompt the Fed to act. Rosner further noted that the wealth effect from rising stock prices might be reflected in inflation figures, potentially providing a rationale for raising rates.
She indicated that items in the PCE basket related to AI spending, such as software and accessories, are expected to rise in the next report, and "the Fed will have to respond to this." Goldman Sachs has adjusted its internal view accordingly, pushing back its expected timing for rate cuts to the end of 2027.
A viewpoint from CICC Wealth Futures stated that rising expectations for Fed rate hikes are supporting a stronger US dollar, which directly depresses dollar-denominated precious metal assets, with gold having briefly fallen below the $4,000 mark. While oil prices have retreated sharply recently, gold has not strengthened, with the core reason being the liquidity siphoning effect from the US stock market. Gold, which was previously overhyped due to its profit-making effect, is gradually returning to rationality, and caution is advised against blindly trying to buy the dip.
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