Gold prices extended their decline on Thursday, staying under pressure near a seven-month low as a stronger US dollar and growing expectations of Federal Reserve rate hikes weighed on investor sentiment.
Spot gold fell 0.2% to US$3,993.33 per ounce as of 0526 GMT, while US gold futures for August delivery were largely unchanged at US$4,008.30.
The precious metal breached the key US$4,000 level for the first time since November 2025 during Wednesday’s session after dropping more than US$140.60 to close at US$4,008.80.
According to RHB Investment Bank Bhd (RHB Research), COMEX gold is showing continued bearish momentum after forming a long bearish candlestick during Wednesday’s trading session.
The research house noted that gold opened at US$4,130 before reaching a high of US$4,132.40, but later fell to an intraday low of US$3,975.70 before closing at US$4,008.80.
“The RSI is moving in a ‘lower low’ trend, showing that bearish momentum is in play,” RHB Research said.
The research house expects gold to make another attempt to break below the US$4,000 support level, with further downside potentially bringing prices towards the next support level of US$3,700.
RHB Research maintained its negative trading bias on gold and advised traders to maintain their short position initiated at US$4,605.70, with a stop-loss level placed at US$4,400.
The first support level is seen at US$4,000, followed by US$3,700, while resistance levels are located at US$4,400 and US$4,650.
Matt Simpson, senior analyst at StoneX, said gold was currently caught in a bearish momentum trend due to the strength of the US dollar.
“Gold is simply in a bearish momentum trade at this point amid a strong U.S. dollar environment,” he said.
The dollar remained near a 13-month high, making gold more expensive for buyers holding other currencies.
Gold has also been pressured by expectations that the Federal Reserve could resume rate hikes this year after inflation remained elevated, partly driven by higher costs linked to the Iran conflict.
Traders are now pricing in three Fed rate hikes this year, with the CME FedWatch Tool showing around a 67% probability of a September rate increase.
Higher interest rates typically weigh on gold as the non-yielding asset becomes less attractive compared with interest-bearing investments.
Analysts warned that gold-backed exchange-traded funds could see renewed outflows if expectations for further rate hikes continue to strengthen.
Investors are also watching the US Personal Consumption Expenditures (PCE) data, the Federal Reserve’s preferred inflation gauge, for further clues on the central bank’s monetary policy direction.
Meanwhile, other precious metals remained under pressure. Spot silver fell 0.1% to US$57.37 per ounce, while platinum declined 0.8% to US$1,566.25, with both hovering near their lowest levels since November 2025.
Palladium edged 0.4% higher to US$1,171.25 but remained close to a nine-month low.
