Gold prices rose on Friday as expectations for U.S. interest rates were reassessed

Gold prices rose slightly during Friday’s trading session to trade near the $4,040-per-ounce level, supported by a modest decline in expectations for U.S. interest rate hikes following the release of the latest U.S. inflation data.

Despite this rise, the precious metal remains on track to post its fourth consecutive weekly loss, having come under heavy pressure in recent days that pushed it to its lowest levels in more than seven months.

Gold Continues to Fall Despite Rebounding from Lows

This week, the price of gold fell below the $4,000-per-ounce level for the first time since November 2025, signaling that selling pressure continues to dominate the market.

This decline coincided with the U.S. dollar rising to its highest level in more than a year, which increased the cost of buying gold for investors outside the United States, negatively impacting global demand.

Although prices have recovered slightly in recent trading sessions, gold continues to trade near these low levels, reflecting ongoing caution among investors.

U.S. Inflation Data Shifts Market Expectations

The release of Personal Consumption Expenditures (PCE) data—the Federal Reserve’s preferred measure of inflation had a direct impact on market movements.

The latest data prompted investors to scale back their expectations regarding the pace of interest rate hikes in the coming period, which provided some support for gold prices following this week’s sharp decline.

However, markets still expect monetary policy to remain tight, with estimates pointing to the possibility of three additional interest rate hikes this year, and the likelihood of a rate hike at the September meeting remaining high.

Why Do Interest Rates Affect Gold?

Gold is considered an asset that does not provide a direct return to investors, so its appeal typically wanes when interest rates rise.

In a high-interest-rate environment, investors tend to favor assets that generate returns, such as bonds and fixed-income instruments, which reduces demand for gold.

For this reason, expectations regarding U.S. monetary policy remain one of the most important factors influencing global gold prices.

Falling Oil Prices and Bond Yields Support the Precious Metal

Conversely, certain factors have emerged that could limit gold’s losses in the coming period.

Crude oil prices fell by more than 2% as concerns over global energy supplies eased, particularly following improved oil tanker traffic through the Strait of Hormuz.

U.S. Treasury yields have also declined somewhat, which may ease pressure on the Federal Reserve and reduce the need to tighten monetary policy at a faster pace.

These developments are helping to partially support gold, especially if inflationary pressures continue to ease in the coming months.

Gold Price Forecast for the Coming Period

Gold’s performance in the coming period will depend on several key factors, most notably upcoming U.S. inflation data, the Federal Reserve’s interest rate decisions, as well as the performance of the U.S. dollar and bond yields.

If markets continue to lower their expectations for interest rate hikes, gold may be able to recoup some of its losses. However, if inflation begins to rise again or the Fed adopts a more hawkish tone, the precious metal could face further downward pressure.