Gold slips below $4,000 as dollar strength rattles precious metals

The market mood has soured significantly following the June 17 Federal Reserve meeting. Traders are moving away from expectations of sustained rate relief toward active hike-risk positioning. The FOMC’s updated projections now forecast a median year-end 2026 policy rate of 3.8%, alongside a rise in PCE inflation expectations to 3.6%. With the dollar index hovering near a 52-week high of 101.71, gold has shed more than 4% since the central bank’s policy shift.

Geopolitical tensions in the Strait of Hormuz, previously a reliable catalyst for haven demand, have failed to provide a floor for prices. As tanker traffic stabilizes and oil benchmarks like WTI and Brent soften, gold is increasingly trading as a pure play on interest rates and currency strength. David Morrison, senior market analyst at Trade Nation, notes that the $4,100 level has transitioned from support to firm resistance. He warns that failing to hold the current shelf at $4,020 to $4,030 could trigger a broader stop-driven liquidation. Silver faces a similar trajectory, trading at its lowest point since December as it tests support near $58.50.