Gold Slips Below $4,000 for the First Time Since November 2025 as Markets Await Key PCE Inflation Data

Gold (XAU/USD) extended its decline for a third consecutive session on Thursday, falling to around $3,995 during Asian trading hours. The move places the precious metal below the $4,000 mark for the first time since November 2025, according to TradingView data. Gold has retreated roughly 29% from its January 2026 record high near $5,608.

What's Driving Gold Lower?

Several factors have combined to pressure gold prices in recent sessions.

The first is a notable shift in Federal Reserve expectations. At its June meeting, Fed officials raised their projections for 2026 inflation, with headline PCE inflation forecast at 3.6% and core PCE inflation at 3.3%, both above the projections released in March. The median dot plot also indicated a year-end federal funds rate of 3.8%, suggesting policymakers remain open to additional policy tightening if inflation remains elevated.

At the same time, easing geopolitical concerns have reduced demand for traditional safe-haven assets. Market sentiment improved after renewed clarity surrounding the reported US-Iran framework agreement, contributing to a moderation in risk premiums that had previously supported gold prices.

According to CME FedWatch data, markets are currently pricing a 34.2% probability of a 25-basis-point rate increase at the July FOMC meeting, compared with just 8.5% a week earlier. Expectations for a rate hike by September have also increased significantly.

Focus Shifts to US PCE Inflation Data

Investor attention now turns to the US May Personal Consumption Expenditures (PCE) Price Index, scheduled for release at 8:30 a.m. EDT on Thursday.

Economists surveyed by FactSet expect headline PCE inflation to rise to 4.1% year-over-year, which would represent the highest reading since April 2023. Core PCE inflation is expected to remain at 3.3%.

A stronger-than-expected inflation reading could reinforce expectations that the Federal Reserve will maintain a restrictive policy stance for longer, potentially supporting the US Dollar and Treasury yields while weighing further on gold prices.

Key Technical Levels

Technical analysts identify the $4,000-$4,100 region as an important support zone, reflecting an area that previously attracted buying interest earlier this year.

Some analysts cited by market research outlets have highlighted the $3,440 Fibonacci extension level as a potential downside target should selling pressure intensify. However, such projections remain technical scenarios rather than certainties.

On the upside, a recovery above $4,300 could help stabilize near-term sentiment and weaken the current bearish technical structure.

Outlook

Gold does not generate yield, meaning its relative attractiveness often declines when Treasury yields and the US Dollar rise. Historically, tighter monetary policy expectations have created headwinds for the precious metal.

While short-term rebounds remain possible, some market analysts believe recovery rallies could continue to encounter selling interest if inflation remains elevated and the Federal Reserve maintains a higher-for-longer policy stance.

Sources: Federal Reserve June 2026 Summary of Economic Projections, CME FedWatch Tool, FactSet consensus estimates, TradingView market data.