Gold and silver prices fluctuated around key levels on Thursday, as hawkish central-bank rhetoric and inflation concerns continued to weigh on precious metals, while analysts see limited chances of a strong near-term recovery.

Spot gold stood near $3,990.17 an ounce at around 5:50 a.m. ET, after falling below the $4,000 mark in the previous session. The yellow metal briefly managed to move back above that level on Thursday before retreating later in morning trading.

Front-month US gold futures edged lower to settle at $4,006.60 an ounce. Since the start of the year, gold has fallen by around 7.5%.

Silver also came under pressure, with spot prices rising 0.1% to $57.49 an ounce on Thursday morning after recovering from earlier losses. July silver futures fell 1.2% to $57.41. Since the start of the year, silver has lost nearly 20% of its value.

Precious metals lose upward momentum

Gold and silver posted record gains in 2025, with gold jumping 66% and silver surging 135% over the year.

But despite continuing to rise at the start of 2026, trading has become more volatile. Silver futures suffered their biggest one-day loss since the 1980s in late January, while gold’s safe-haven appeal faded after the outbreak of the US-Iran war in February.

Macquarie analysts said in a note on Wednesday that the focus is now on the path of inflation and whether central banks, especially the US Federal Reserve, will tighten monetary policy to contain rising prices.

They added that the end of the Middle East conflict, along with the Federal Reserve’s hawkish stance, pushed prices lower as gold’s safe-haven appeal declined amid expectations of higher interest rates and a stronger dollar, noting that markets are currently pricing in a US rate hike in the final quarter of the year.

Market expectations now point to a possible Federal Reserve rate hike in September, according to CME Group’s FedWatch tool.

The European Central Bank and the Bank of Japan also raised interest rates this month in response to the energy-price shock caused by the Iran war.

Inflation and interest rates weigh on gold

Macquarie said the first meeting under new Federal Reserve Chair Kevin Warsh carried a hawkish tone, and that the central bank under his leadership could be a decisive factor in either supporting or pressuring gold prices.

It added that an expected slowdown in global growth following the Middle East fallout, followed by a gradual recovery and a later monetary-easing cycle, could push gold prices lower as investor funds move from precious metals into other assets.

The firm said investors have already started taking profits and rotating into equities, adding that renewed interest in precious metals may require a major economic event to restore momentum.

Macquarie expects spot gold to average around $4,641 an ounce in 2026, up 35% year on year, but forecasts a 9.5% decline to $4,200 in 2027, with the downtrend continuing until 2030.

It also lowered its year-end gold price forecast to $4,300 from $4,400 previously.

Silver faces further downside risks

Macquarie said profit-taking weighed on silver prices over the past month, noting that price action has become more closely linked to macroeconomic factors as expectations for a US rate hike increased.

It added that silver prices may remain range-bound through the rest of the year before gradually declining in 2027 due to inflation pressures and the possibility of higher interest rates.

The firm expects silver to reach $70 an ounce in the fourth quarter of this year before falling to $65 by the end of 2027.

Central banks continue to support gold

Guy Adami, co-founder of RiskReversal Media and a trader on “Fast Money,” said gold still has opportunities despite the current pressure.

He added that investors are questioning why they should hold gold while AI stocks are rising sharply, but said he believes inflation will remain a problem and that interest rates may rise before gold returns to the spotlight.

He noted that gold is now down around 24% from its all-time high, but said central banks are likely to continue increasing their gold holdings, keeping the metal on investors’ radar for the rest of the year.

An annual survey by the World Gold Council showed that central banks still view gold as an important tool for hedging against inflation and geopolitical risks, with around 90% of respondents saying they expect central-bank gold reserves globally to increase over the next year.

By contrast, a number of Wall Street analysts have recently lowered their gold price forecasts.

OCBC analysts said pressure on gold remains strong after the break below $4,000, and that price action has become more closely tied to real yields.

They added that the Federal Reserve’s continued hawkish tone and rising real yields call for near-term caution, and that any gold rallies may remain vulnerable to pullbacks unless yields decline, ETF selling eases, or the central bank’s tone shifts.

Oil prices fell on Thursday to levels not seen since before the outbreak of the war with Iran, as expectations of rising supply from the Middle East outweighed demand concerns.

Brent crude futures for August delivery fell 1.46%, or $1.08, to $72.66 per barrel by 09:52 GMT, while US West Texas Intermediate crude futures declined 84 cents, or 1.19%, to $69.50 per barrel.

Both benchmarks recorded their lowest levels since February 27, before the US and Israeli strikes on Iran began.

US Energy Secretary Chris Wright said during a forum that oil flows through the Strait of Hormuz are approaching pre-war levels, noting that at least 20 million barrels of oil passed through the strait over the past 24 hours.

However, he said a full return to normal conditions could take several weeks due to the need to clear naval mines from the strait.

Giovanni Staunovo, analyst at UBS, said: “Most of the increase in flows from the Gulf is related to ships exiting the Strait of Hormuz.”

He added that the sharp increase in vessel traffic heading into the region requires the return of confidence among shipping companies, including the provision of security guarantees and the removal of naval mines, allowing insurance costs to return to normal levels.

Rising supply pressures global oil prices

Higher oil supplies from the Middle East, combined with Iran’s readiness to increase exports following a temporary easing of US sanctions, have pushed down spot crude cargo prices around the world.

Goldman Sachs said it does not expect a significant increase in Iranian oil production, even if sanctions relief continues beyond the current August 21 deadline.

The bank added that China is likely to remain the main buyer of Iranian oil, while European Union and UK sanctions on Iranian oil and shipping remain in place.

An agreement reached last week to end the US-Israeli war, which began on February 28, allowed shipping traffic through the Strait of Hormuz to resume.

The agreement includes a 60-day negotiation period to address more complex issues, including Iran’s nuclear program.

Wright said oil flows through the strait would continue even if the agreement fails to hold, adding that Iran would not be able to close the waterway again.

UBS lowered its Brent crude forecasts to $85 per barrel by the end of September and December, and to $80 per barrel by the end of March and June 2027.

Iraq signals options regarding OPEC

Separately, sources familiar with Iraqi oil policy told Reuters that Iraq will consider all available options if its production quota within the Organization of the Petroleum Exporting Countries (OPEC) is not significantly increased, including the possibility of leaving the organization.

The possibility of Iraq considering an exit from OPEC comes after the surprise departure of the United Arab Emirates from the group earlier this year.

Iraq is one of OPEC’s five founding members. The organization was originally established in Baghdad, the Iraqi capital.

On the geopolitical front, Ukrainian President Volodymyr Zelenskyy said on Thursday that Ukrainian forces targeted an oil storage facility in Russia’s Krasnodar region, as well as two oil refineries in the Ufa region, about 1,500 kilometers from the Ukrainian border.

The US dollar is on track on Thursday for its biggest monthly gain in nearly a year, ahead of US inflation data that could reinforce the view of a growing number of investors that the Federal Reserve will be forced to raise interest rates at least once this year.

The dollar hit a 13-month high against the euro on Wednesday, pushing the single currency below the $1.14 level. The dollar’s strength also sent the British pound to its lowest level in seven months and kept the Japanese yen near its weakest level in 40 years at around 161.79 per dollar.

The stronger dollar pushed gold temporarily below $4,000 per ounce for the first time in more than seven months and drove Bitcoin below $60,000 for the first time since 2024.

The Dollar Index, which measures the US currency against a basket of six major currencies, stood near 101.5 points on Thursday after touching a 13-month high of 101.8 points the previous day.

Before the outbreak of the US-Israel war against Iran, traders had expected the Federal Reserve to cut interest rates this year. They now expect at least one rate hike, possibly beginning in October, with roughly a 50% chance of a second hike before year-end.

During this month alone, the yield on two-year US Treasury notes, which reflects short-term interest-rate expectations, has risen by about 14 basis points to 4.15%.

By comparison, German two-year government bond yields have risen by only 2 basis points to 2.56%, while UK two-year government bond yields have fallen by about 9 basis points.

Lee Hardman, currency strategist at MUFG Bank, said the interest-rate market clearly reflects investors’ belief that the Federal Reserve “will back up its hawkish inflation rhetoric by raising interest rates this year.”

He added: “If the Federal Reserve is serious about restoring price stability, significantly tighter monetary policy will be necessary. Therefore, it makes sense for markets to price in additional rate hikes, which has recently supported the US dollar.”

US inflation data in focus

The British pound rose 0.17% to $1.319 after falling on Wednesday to its lowest level since November at $1.314.

The dollar slipped against the Swiss franc to around 0.811 francs, remaining close to an 11-month high.

On the economic front, markets are awaiting the release of May core Personal Consumption Expenditures data, the Federal Reserve’s preferred inflation gauge.

Economists surveyed by Reuters expect the index to rise 3.4%, well above the central bank’s 2% target.

Brent Donnelly, president of Spectra Markets, said: “Further gains for the dollar will require a wider expansion in interest-rate differentials, but in the short term companies need dollars, and they will continue to need them for a few more days.”

He added: “My view is that this creates a positive feedback loop for the dollar, as speculators add new positions and technical indicators continue to move in its favor, but that loop will likely lose momentum soon.”

Further dollar gains could push Japan to carry out its intervention threats in support of the yen, as traders see levels near 162 yen per dollar or higher as a potential intervention zone.

Hirofumi Suzuki, chief currency strategist at SMBC Bank in Tokyo, said: “Given the build-up of short yen positions, the impact of any intervention would be significant if it is carried out.”

Gold prices rose in the European market on Thursday, attempting to recover from a seven-month low and heading toward their first gain in three days, with buying activity from lower levels and attempts to trade above $4,000 per ounce again.

This rise is supported by a pause in the US currency’s advance against a basket of global currencies, as investors await important US Personal Consumption Expenditures data, which will provide crucial clues about the Federal Reserve’s interest rate path this year.

The Price

• Gold prices today: Gold prices rose 0.5% to $4,018.719, from the opening level of $3,999.28, and recorded a low of $3,963.18.

• At Wednesday’s settlement, gold prices lost 2.75%, marking their second consecutive daily loss, and recorded a seven-month low of $3,959.49 per ounce, due to pressure from the rising US dollar.

US dollar

The US Dollar Index fell about 0.15% on Thursday, retreating from a 13-month high of 101.80 points, reflecting a pause in the US currency’s advance against a basket of global currencies.

Aside from profit-taking, the US dollar is retreating as investors refrain from building new long positions ahead of the release of the US Personal Consumption Expenditures report for May, the Federal Reserve’s preferred inflation gauge.

Consumer spending data, along with comments from some Federal Reserve officials, are expected to provide crucial clues about the likelihood of at least one US interest rate hike this year.

US interest rates

• Chicago Federal Reserve President Austan Goolsbee said that with the labor market stable, he is focused on determining whether elevated inflation will remain that way or ease as the impact of higher tariffs fades, and if a solution is reached to the Middle East conflict.

• According to CME Group’s FedWatch Tool, pricing for the Federal Reserve to leave interest rates unchanged at the July meeting currently stands at 66%, while pricing for a 25-basis-point rate hike stands at 34%.

• Pricing for the Federal Reserve to leave interest rates unchanged at the December meeting currently stands at 16%, while pricing for a 25-basis-point rate hike stands at 84%.

Gold outlook

• Matt Simpson, senior analyst at StoneX, said: Gold is seeing bearish momentum this week because of the strength of the US dollar.

• Nikos Tzabouras, senior market analyst at Tradu.com, said: The Federal Reserve’s hawkish shift, which led to a repricing of rate hike expectations, remains the main factor behind the weakness in gold prices.

SPDR Fund

Gold holdings at SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell by 4.27 metric tons on Wednesday, marking the second consecutive daily decline, bringing the total down to 1,013.36 metric tons, the lowest level since June 17.