Gold Falls for Fourth Consecutive Month with 12.7% Monthly Decline as Fed Rate Hike Expectations Dominate
Alina Collins
Gold posted a fourth consecutive monthly decline at 12.7%, as the market's pricing driver shifted from geopolitical risk to expectations of three Fed rate hikes this year; this week's payrolls data will decide whether the selloff finds a floor.
How far did gold fall?
Spot gold dropped 1.5% to $3,957.74/oz; U.S. gold futures for August delivery fell 1.7% to $3,971.60.
This was the fourth straight monthly decline, with a 12.7% loss for the month — a rare streak of sustained selling.
This means → gold has left the trajectory driven by geopolitical-risk premiums and entered a systematic pullback led by interest-rate expectations.
Why is it falling? How do rate-hike bets suppress gold?
CME FedWatch data shows traders now price in three Fed hikes this year, with a roughly 63% probability of a September move.
In plain terms = higher rates mean dollar assets pay more interest, while gold pays none — capital naturally flows from gold into the dollar.
The dollar strengthened in tandem, posting a clear monthly gain and raising the cost of gold for holders of other currencies.
Geopolitical risk hasn't gone away — why isn't it supporting gold?
U.S.–Iran negotiating teams were set to meet in Doha this week, but Iran said the session has not been scheduled; weekend missile exchanges have tested the interim ceasefire.
This reflects a shift in market attention: geopolitical tension persists, but rate-hike expectations now dominate pricing — when the interest-rate narrative outweighs the safe-haven narrative, the geopolitical premium gets squeezed out.
Separately, the U.S. Supreme Court refused to let Trump fire Fed Governor Cook, preserving central-bank independence and removing one source of policy uncertainty.
How did other precious metals perform?
Silver fell 2.4% to $56.89/oz; platinum dropped 1.1% to $1,557.08; palladium slipped 0.5% to $1,207.
All three metals posted monthly losses.
This means → rate-hike expectations are exerting systemic pressure across the entire precious-metals complex, not just gold.
What comes next?
This week brings June ADP employment and nonfarm payrolls data — the key window for markets to reassess the Fed's policy path.
In plain terms = if jobs data beats expectations, the economy looks strong enough for the Fed to hike — and gold's near-term downside pressure will be hard to relieve.
Guinea plans to become West Africa's gold-refining hub, joining a broader push by producing nations to smelt locally and reduce raw-gold exports. That is a long-term supply variable, but it cannot offset rate pressure in the short term.
Content is for reference only, not financial advice.