Gold markets experienced sharp volatility this week as spot gold fell 1.46% to $4157.808 per ounce on Friday (June 19), marking the third consecutive day of decline and bringing year-to-date losses to 3.72%, according to Wind data. The Federal Reserve maintained interest rates while signaling possible rate hikes in 2026, triggering large-scale selling after geopolitical tensions in the Middle East briefly pushed prices to $4380 per ounce. COMEX gold futures dropped 1.72% to $4172.9 per ounce, down 5.71% year-to-date, as Wall Street institutions shifted to bearish outlooks amid the Fed's hawkish policy stance.
Spot and Futures Gold Prices Record Third Consecutive Daily Decline
According to Wind data, as of Friday (June 19) New York close, spot gold prices declined 1.46% to $4157.808 per ounce, representing the third consecutive day of losses. COMEX gold futures fell 1.72% to $4172.9 per ounce. Year-to-date, spot gold has declined 3.72% while COMEX gold futures have fallen 5.71%.
Middle East geopolitical tensions generated safe-haven buying that pushed gold prices to $4380 per ounce earlier in the week. Following the Federal Reserve's decision to maintain interest rates and signal possible rate hikes in 2026, markets experienced large-scale selling.
Domestic China Gold Jewelry Prices Fall Over 25% From Year Highs
Multiple domestic China brands reported foot gold jewelry prices falling to around 1260 yuan per gram, down approximately 450 yuan from year highs, representing a decline exceeding 25%. Chow Tai Fook reported foot gold jewelry at 1261 yuan per gram, while Chow Sang Sang priced foot gold at 1263 yuan per gram.
Several brands fell below the 1260 yuan threshold. Lao Feng Xiang reported foot gold jewelry at 1258 yuan per gram, Saturday Fortune at 1256 yuan per gram, and Luk Fook Jewellery at 1259 yuan per gram.
Goldman Sachs Cuts 2026 Gold Target to $4900 Per Ounce
Goldman Sachs this week reduced its 2026 year-end gold target price from $5400 per ounce to $4900 per ounce, characterizing its near-term strategy as "tactically cautious." The institution warned that if rate hikes materialize, gold prices could fall further to $4440 per ounce.
Goldman Sachs attributed the target reduction to two factors. First, Goldman Sachs economists earlier this month postponed the Federal Reserve's final two rate cuts to 2027, meaning no rate cuts will occur in 2026, significantly suppressing expectations for interest-rate-sensitive gold ETF demand. Second, Chair Waller's first FOMC meeting released "more hawkish than expected" signals, which will limit market concerns about developed market central bank independence over coming quarters, thereby reducing gold's appeal as a macro policy hedge.
Goldman Sachs noted that short-term disruptions do not change long-term trends, with fundamentals supporting continued bull market conditions. In an optimistic scenario, if macro policy hedge demand (gold call option demand) rebounds to early January 2026 levels, year-end gold prices could significantly exceed $6000 per ounce.
Wall Street Analysts Issue Bearish Forecasts for Near-Term Gold Prices
Citigroup issued a research report reducing its three-month gold target price from $4300 per ounce to $4000 per ounce.
According to precious metals information website Kitco News, in a next-week gold price outlook poll involving 10 Wall Street analysts, the majority turned bearish due to Federal Reserve meeting impacts. Only 1 analyst predicted gold prices will rise next week, 7 predicted declines, and 2 predicted range-bound trading.
Nicky Shiels, Head of Research and Metals Strategy at MKS PAMP, stated that the new Federal Reserve chair has not brought any benefits to gold. Shiels believes this meeting makes the gold price rebound from around $4000 per ounce look increasingly like a tactical bounce rather than a structural reversal. The statement and press conference should be interpreted as more hawkish than market expectations until the Fed's final decisions become clear. "This rebound should be sold, not chased," Shiels said.
Alex Kuptsikevich, Senior Market Analyst at FxPro, expects gold prices to continue declining next week. "The gold price increase triggered by the U.S.-Iran memorandum of understanding signing appears to have ended under the Fed's hawkish stance, triggering a wave of dollar buying. From a technical analysis perspective, the long-standing key support level—the 200-day moving average—has transformed into a resistance level. However, to confirm this view, gold prices need to fall below $4000, breaking below the key round number and the previous rebound zone. Nevertheless, bulls still hold a glimmer of hope that this price level will attract buyers again," Kuptsikevich said. "Regardless, I would not be surprised if $4000 is tested again next week."
Institutions Maintain Long-Term Bull Case Despite Short-Term Headwinds
Goldman Sachs stated that central banks continue to allocate gold heavily. Geopolitical tensions and regional conflicts will drive investors to increase gold allocation in asset portfolios. "Gold's share in private investment portfolios remains at low levels. Geopolitical events such as U.S.-Iran conflicts may accelerate capital diversification into gold; related situations will also undermine market confidence in Western countries' fiscal sustainability, further benefiting gold," Goldman Sachs wrote.
Axel Merk, Founder and CEO of Merk Investments, stated that even if the Federal Reserve focuses policy on fighting inflation and turns hawkish overall, gold investors need not conclude this policy shift will end the precious metal's long-term bull market.
In Merk's view, the short-term market headwinds gold currently faces will ultimately strengthen gold market's long-term development foundation. Hawkish monetary policy can significantly reduce policy-level market uncertainty and guide investors beyond short-term interest rate fluctuations to refocus on the United States' continuously deteriorating fiscal fundamentals.
"Gold is not an asset that generates dividends or income. Perhaps investors are seeking other options, whether government bonds or other income-generating assets, as interest rates are generally high currently. When high-yield alternatives exist, gold's attractiveness decreases. But overall, gold has been one of the best-performing assets in recent years. I think what we're seeing is a healthy reset," said David Chao, Global Market Strategist for Asia Pacific at Invesco.
FAQ
What caused gold prices to fall on Friday (June 19)?
Gold prices fell 1.46% to $4157.808 per ounce on Friday (June 19) following the Federal Reserve's decision to maintain interest rates while signaling possible rate hikes in 2026, which triggered large-scale market selling.
Why did Goldman Sachs reduce its 2026 gold target price?
Goldman Sachs cut its 2026 year-end gold target from $5400 per ounce to $4900 per ounce, citing two factors: Goldman Sachs economists postponed the Federal Reserve's final two rate cuts to 2027, eliminating expected 2026 rate cuts, and Chair Waller's hawkish FOMC signals will limit concerns about central bank independence, reducing gold's appeal as a macro policy hedge.
How much have domestic China gold jewelry prices declined from year highs?
Domestic China gold jewelry prices fell to around 1260 yuan per gram, down approximately 450 yuan from year highs, representing a decline exceeding 25%.
