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20.06.2025

Gold falls for the week amid strong dollar and fewer Fed rate cut hopes

Gold prices declined on Friday, heading for their first weekly loss in three weeks, as fading haven demand and a firmer U.S. dollar weighed on the market. 

U.S. gold futures dropped 1.3% to $3,364.30, down 2.5% for the week.

Easing geopolitical tensions in the Middle East and uncertainty over U.S. involvement in the Israel-Iran conflict have tempered demand for safe-haven assets. President Donald Trump is expected to decide within two weeks whether the U.S. will join Israeli airstrikes, which has reduced immediate fears of escalation.

At the same time, the Federal Reserve’s steady interest rate stance and caution over inflation, driven partly by Trump’s tariff policies, have diminished expectations for aggressive rate cuts. The Fed held rates steady this week but still projects two cuts later this year. Trump has continued to call for deeper rate reductions.

Analysts say the strengthening dollar and stable yields have limited gold’s appeal. A stronger greenback makes gold more expensive for non-dollar holders. Despite the recent dip, gold remains up over 25% this year and is trading just below its record high above $3,500.

Investor interest may be shifting, however, with signs of growing demand for platinum as a cheaper alternative haven. Meanwhile, Wall Street remains divided: Goldman Sachs maintains a bullish $4,000 gold forecast for next year, while Citigroup expects prices could fall below $3,000 by 2026.

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