Warning! Gold Price Plummets to US$4,000 Level
Jakarta, CNBC Indonesia - Gold and silver prices slumped amid rising expectations of a Federal Reserve interest rate hike. This expectation offset positive sentiment from falling oil prices amidst progress in US-Iran negotiations.
Citing Refinitiv, gold closed at US$4,108.35 per troy ounce in trading on Tuesday (23/6/2026), plunging 1.96%. This weakening reversed the 0.63% gain on Monday.
Gold prices continued to freefall. On Wednesday (24/6/2026) at 06:43 WIB, gold slumped 0.6% to US$4,083.89 per troy ounce. This is the lowest price since 10 June 2026.
However, it should be noted that gold rarely touches the US$4,000 level. Before 10 June 2026, the last time gold touched the US$4,000 level was in November 2025.
The US dollar strengthened to its highest level in more than a year. In trading on Tuesday (23/6/2026), the dollar index closed at 101.408, the highest since May 2025 or the last 13 months. The strengthening dollar makes gold more expensive for buyers using other currencies, thus suppressing demand.
“For now, gold and silver are not reacting much to the Middle East situation. The market is more focused on the message delivered by the Federal Reserve last week,” said StoneX Senior Market Strategist Bob Haberkorn to Reuters.
Hawkish signals from Fed Chair Kevin Warsh in efforts to curb inflation have prompted investors to increase bets on interest rate hikes. According to CME FedWatch, the probability of a rate hike in December now stands at around 86%, up from 61% before the Fed meeting last week.
Although gold is often considered a hedge against inflation, the precious metal tends to be pressured when interest rates are high because it does not offer a yield.
On the geopolitical front, the US granted a 60-day sanctions exemption to Iran after the first round of peace talks. However, tensions in Lebanon continue. Previously, US Vice President JD Vance said talks with Iranian officials in Switzerland had created a good foundation towards a final peace deal. Tanker traffic through the Strait of Hormuz, which had previously been disrupted, is also beginning to return to normal.
Meanwhile, Brent crude oil prices fell more than 1% on Tuesday.
Market participants are now awaiting US Personal Consumption Expenditures (PCE) Price Index data, to be released Thursday, as a new clue regarding the direction of the Fed’s monetary policy.