Gold begins recovery after hitting its lowest level of 2026

Gold prices rose more than 1% in European trading on Thursday, beginning a recovery from their lowest level of 2026 recorded earlier in Asian trading. Buying interest emerged at lower levels near the key $4,000-per-ounce mark, supported by a weaker US dollar and lower oil prices following a halt in military escalations between the United States and Iran, as hopes for a peace agreement to end the conflict in the Middle East resurfaced.

With markets continuing to price in elevated odds of a Federal Reserve interest rate hike in December, investors are awaiting additional key US economic data, particularly producer price figures due later today.

The Price

• Gold prices today: Gold gained 1.1% to $4,118.23 per ounce, up from an opening level of $4,072.07, after touching an intraday low of $4,023.86, its lowest level since November 2025.

• At Wednesday’s settlement, gold prices fell 4.5%, marking a fourth consecutive daily loss and the largest one-day decline since February 2, amid continued heavy selling across precious metals markets.

US dollar

The US Dollar Index fell 0.2% on Thursday, resuming losses that were temporarily paused on Wednesday and moving further away from two-month highs, reflecting weakness in the US currency against a basket of global peers.

The decline followed the conclusion of a new round of US strikes on Iran, which are being viewed as part of a pressure strategy aimed at encouraging Iranian authorities to make greater progress in ongoing peace negotiations, potentially paving the way for a final agreement that could reduce tensions and enhance stability across the Middle East.

Global oil prices

Global oil prices fell around 3%, heading toward fresh multi-week lows after the United States denied reports that the Strait of Hormuz had been closed to maritime traffic, easing concerns about disruptions to global energy supplies.

Developments in the Iran conflict

• The United States launched new airstrikes on Iran for a second consecutive day.

• Prior to the attacks, President Donald Trump said the United States would carry out a "very strong" strike against Iran.

• US Defense Secretary Pete Hegseth said Washington would target "vital facilities."

• The attacks represent one of the most serious escalations since the April ceasefire.

• Iran’s Revolutionary Guard said US military bases in Kuwait and Bahrain were targeted with drones and missiles.

• Tehran announced the complete closure of the Strait of Hormuz due to security concerns, while Washington denied that the strait had been closed.

• Diplomatic sources said US-Iran talks remain on track.

US interest rates

• Goldman Sachs expects the Federal Reserve to leave interest rates unchanged throughout 2026 and delay any rate cuts until 2027, citing stronger economic activity and job growth.

• Data released on Wednesday showed US consumer inflation rising at its fastest pace in three years during May, driven by higher energy prices amid the Middle East conflict.

• According to CME Group's FedWatch Tool, markets are currently pricing a 67% probability of a Federal Reserve rate hike at the December meeting.

• Markets also continue to price a 98% probability that rates will remain unchanged at the June meeting, while the odds of a 25-basis-point rate cut stand at 2%.

• Investors are now awaiting US producer price data for May later today, which could reshape interest rate expectations.

Gold outlook

Matt Simpson, senior analyst at StoneX, said that as prices approach the $4,000 level, it represents a clear support zone that could encourage sellers to take profits quickly or convince sidelined buyers to remain patient.

Simpson added that the US Dollar Index failed to post meaningful gains following Wednesday’s Consumer Price Index report. Therefore, unless producer price data delivers an unpleasant surprise, gold could experience a technical rebound in the near term.

SPDR Gold Trust

Holdings of the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, declined by 2.86 metric tons on Wednesday, marking a second consecutive daily decrease. Total holdings fell to 1,013.64 metric tons, the lowest level since October 9, 2025.