Gold price falls below $4,000! Dollar strength accelerates to a seven-month low

Today's featured news

On June 25, gold (XAU/USD) plunged, briefly falling to $3,986.

Breaking the psychological $4,000 level, a move last seen around November 2025, about seven months ago.

Despite declines in oil prices and US treasury yields, dollar strength pushed gold lower.

Why did it plunge?

There were three main factors behind the drop this time.

1) Dollar index at 13-month high

The strongest factor is the dollar’s strength.

The Dollar Index (DXY) rose briefly

to 101.80

and marked a 13-month high.

Gold denominated in dollars tends to look overvalued in a strong-dollar environment, increasing selling pressure.

2) Gold not supported by oil declines

With progress in talks between the US and Iran,

expectations for the reopening of the Strait of Hormuz rose.

As a result, WTI crude fell

3.40%

to $70.55.

Usually, a retreat in inflation concerns supports gold, but in this instance the impact of the stronger dollar outweighed that, pushing gold lower.

3) Fed rate hike expectations remain persistent

According to Prime Terminal,

At the next FOMC meeting,

60% for holding rates

40% for a rate hike

are priced in by the market.

Additionally, by December

82%

is pricing in a rate hike, and the view that higher rates will be prolonged remains strong.

This Week's Notable Events

Important events that will influence future price action continue.

Key indicators

- Q1 GDP advance estimate

- Core PCE (Fed-focused inflation gauge)

- Durable goods orders

- Initial jobless claims

Results could further strengthen the Fed rate hike expectations.

Technical Analysis

Gold has clearly broken below the 200-day moving average (around $4,473), making a downward trend more evident.

The RSI is entering oversold territory, but downside momentum remains strong.

Resistance

$4,000

$4,098

Support

$3,950

$3,900

$3,886

$3,500

First focus is whether prices can recover above $4,000 in the near term.

Summary

✅ Gold slid to $3,986

✅ Briefly fell through $4,000 for the first time in about seven months

✅ Dollar index at 13-month high

✅ Dollar strength outweighed crude oil declines in pressuring gold

✅ December rate hike probability at 82%

✅ Next focus on GDP and core PCE

Breaking the psychological level of $4,000 has deepened market cautious sentiment.

From here, depending on economic data, there is a key fork: whether to rebound or continue dropping into the $3,900s.