Gold
Tech-Led Selloff Pushes Gold Below $4,100
After a sharp selloff on Wall Street led by technology stocks, gold continued its decline, as the selloff caused investors to liquidate gold holdings in order to cover losses from the selloff in other parts of their portfolio.
On Tuesday, gold fell below $4,100 per ounce after a selloff in technology stocks caused a wave of profit-taking across the market. With a selloff of most other assets, investors were putting their money into cash.
The precious metal was down 2.2% to $4,099.84 per ounce, after hitting a two-month low, and the other precious metal, silver, was down 5% to $61.83 per ounce.
Losses in the technology stocks, especially the recent AI/internet rally stocks of Nvidia, AMD, and Micron, were across the board due to increased aversion to risk in the market.
Hawkish Fed bodes well For Dollar
The drop was also exacerbated by increasing market expectations for the Federal Reserve to prolong an even higher rate cycle.
Expectations that policy rates will be tightened following the Fed’s meeting in June presided by former Federal Reserve governor Kevin Warsh helped bolster yields on US government bonds and push up the U.S. Dollar Index to 101.13, the highest it had been since May 25, 2025.
When the dollar is strengthening and borrowing cost is getting high, the precious metal, especially gold that doesn’t give out any income and thus not comparable with yielding investment, should be a weaker asset.
Shoring demand dries up
Further impacting gold’s movement was geopolitical worries receding. After the U.S. And Iran signed the 60-day preliminary peace accord for peace road map earlier this month, the need for safe haven assets were also lowered, contributing to a recent sharp correction in bullion price.
This could explain why several investment banks cut forecasts for the price of gold due to postponed interest rate cuts, strong U.S dollar and soft demand for safe haven assets.
In spite of the correctional movement, the price of gold is still higher compared with a year ago although lower than earlier this year's record level.
Source: Bloomberg
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