Gold Enters Red Zone, Falls for Three Consecutive Days Pummelled by US and China

Gold prices plunged more than 1% as a strengthening US dollar and hawkish signals from the Federal Reserve weighed on the precious metal. According to Refinitiv, gold closed at US$4,160 per troy ounce on Friday (19/6/2026), tumbling 1.15%. The decline extended its negative trend, with gold falling 3.92% over three consecutive days. The closing price was also the lowest since 10 June 2026. Overall, gold weakened 1.39% this week, meaning the price has now fallen for three straight weeks. The drop in gold was triggered by a stronger US dollar. The greenback held at the 100 level for the past three days, remaining within the highest range in the past year. This made dollar-denominated gold more expensive for holders of other currencies. Trading in mainland China and Hong Kong was closed for the Dragon Boat Festival holiday, resulting in thinner market activity. “The gold rally triggered by the US-Iran peace deal proved short-lived. The resurgence of the US dollar, driven by a more hawkish tone from the Fed under Kevin Warsh’s leadership, is now the centre of attention,” said KCM Trade Chief Market Analyst Tim Waterer. “The new Fed chair’s assertiveness has effectively erased support from geopolitical factors, reminding the market that monetary policy remains the primary determinant of price direction,” he added. Nine out of 19 US central bank officials projected that the benchmark interest rate still needs to be raised this year. This view aligns with several global central banks that have raised or signalled rate hikes to curb inflationary pressures triggered by the Iran war. According to the CME FedWatch Tool, market participants now see an 87% chance of a US rate hike in December, up from 61% before the Fed’s latest decision. Gold tends to lose its appeal when interest rates are high because it offers no interest yield. On the geopolitical front, planned US-Iran negotiations in Switzerland were cancelled after US Vice President JD Vance scrapped his visit to the country, adding uncertainty over the sustainability of the ceasefire. In the physical market, gold demand in India was moderate this week despite prices falling to their lowest in two and a half months and moving in a volatile manner. Meanwhile, China, the world’s largest gold consumer, shifted to a discount position.