📉 Gold loses 1.7%

Gold is down nearly 2% today, falling below $4,100 per ounce, while silver is selling off by almost 3% and has slipped back below $60 per ounce. There are two main reasons behind the move. The first is that oil prices are rising again across global markets, even as tanker traffic through the Strait of Hormuz continues to normalize.

• In addition, the yield on the 10-year US Treasury rose by nearly 8 basis points on Wednesday to around 5.35%, its highest level since April 2002. Such elevated yields increase financing costs across the economy and can weigh on non-yielding assets such as gold and Bitcoin.

• Although inflows into gold-backed ETFs have increased recently and central banks continue to signal further purchases, this has so far failed to translate into higher prices. Almost the entire rally since August has now been erased, while investors are increasingly concerned about the prospect of further US rate hikes.

GOLD and SILVER charts (D1 timeframe)

Gold price vs total ETF holdings

Total gold holdings in ETFs have risen significantly in recent months and now exceed 101 million ounces, reaching the highest level shown on the chart. Importantly, this increase in ETF exposure has taken place despite a sharp decline in the gold price from around $5,200–5,400 to roughly $4,157 per ounce. This divergence suggests that some investors are using the pullback to increase their exposure to gold rather than reducing positions alongside the price correction. If ETF inflows persist, they could become an important medium-term stabilizing factor for the market, even if pressure from high yields and interest rates remains elevated.

Source: XTB Research

Expected Fed rate for June 2027 vs gold price

Expectations for the Fed funds rate in June 2027 have moved clearly higher, with the market now pricing a level of around 4.6%. At the same time, gold remains under pressure and is trading near $4,157 per ounce, well below this year’s highs. In recent months, the relationship has been relatively clear: higher expected interest rates have generally coincided with weaker gold prices, as higher rates increase the opportunity cost of holding a non-yielding asset. If the market continues to shift toward expectations of a more restrictive Fed policy stance, this could remain an important factor limiting gold’s upside potential.

Source: XTB Research