Gold Tumbles to Three-Week Low on Rate Hike Odds and Higher Treasury Yields

Spot gold prices have fallen to a three-week low of $4,321.31 per ounce due to increased rate-hike odds and higher Treasury yields.

The US-Iran strikes have lifted oil prices for a third session, driving up inflation concerns and further boosting the chances of a September Fed rate hike from 66% to 70%, according to CME FedWatch-implied probabilities.

Goldman Sachs is targeting $4,900 per ounce by year-end 2026 in its base case, assuming rate cuts resume in 2027 and ETF inflows stabilize. If the Fed hikes, Goldman's downside scenario targets $4,400 per ounce, about 1.8% above the current price.

Despite record prices, physical demand for gold remains strong, with retail buyers purchasing around 25% of global gold demand in 2025, according to the World Gold Council.