{"id":4619,"date":"2026-06-11T16:32:57","date_gmt":"2026-06-11T16:32:57","guid":{"rendered":"https:\/\/www.finznest.com\/blog\/gold-slumps-to-6-month-low-even-as-inflation-fears-rise-heres-why-bullion-is-out-of-favor\/"},"modified":"2026-06-11T16:32:57","modified_gmt":"2026-06-11T16:32:57","slug":"gold-slumps-to-6-month-low-even-as-inflation-fears-rise-heres-why-bullion-is-out-of-favor","status":"publish","type":"post","link":"https:\/\/www.finznest.com\/blog\/gold-slumps-to-6-month-low-even-as-inflation-fears-rise-heres-why-bullion-is-out-of-favor\/","title":{"rendered":"Gold slumps to 6-month low even as inflation fears rise. Here&#8217;s why bullion is out of favor"},"content":{"rendered":"<div id=\"RegularArticle-ArticleBody-5\" data-module=\"ArticleBody\" data-test=\"articleBody-2\" data-analytics=\"RegularArticle-articleBody-5-2\"><span class=\"HighlightShare-hidden\" style=\"top:0;left:0\"\/><\/p>\n<div class=\"InlineImage-imageEmbed\" id=\"ArticleBody-InlineImage-108248572\" data-test=\"InlineImage\">\n<div class=\"InlineImage-wrapper\">\n<div>\n<p>Gold bars are displayed in a photo illustration, reflecting recent movements in gold prices driven by inflation concerns and central bank policy outlooks in Brussels, Belgium, on December 23, 2025. (Photo by Jonathan Raa\/NurPhoto via Getty Images)<\/p>\n<p>Nurphoto | Nurphoto | Getty Images<\/p>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"group\">\n<p>Gold fell to a fresh six-month low on Thursday as investors dump the once-hot trade on growing concern that higher inflation will force the Federal Reserve into possibly raising rates later this year, or at least keep them steady.<\/p>\n<p>There are other factors at play as well.<\/p>\n<p>August <span class=\"QuoteInBody-quoteNameContainer\" data-test=\"QuoteInBody\" id=\"RegularArticle-QuoteInBody-2\">gold futures<span class=\"QuoteInBody-inlineButton\"><span class=\"AddToWatchlistButton-watchlistContainer\" id=\"-WatchlistDropdown\" data-analytics-id=\"-WatchlistDropdown\"><button class=\"AddToWatchlistButton-watchlistButton\" aria-label=\"Add To Watchlist\" data-testid=\"dropdown-btn\"><span class=\"AddToWatchlistButton-addWatchListFromTag\"\/><\/button><\/span><\/span><\/span> touched $4,046.20 on Thursday, their lowest level since November. Gold is down 6.3% this week alone, putting it on pace for a second straight weekly loss and its worst week since mid-March,\u00a0 when gold fell 9.62%.<\/p>\n<p>It was last down 0.5% to $4,111.10.<\/p>\n<h3 class=\"ArticleBody-smallSubtitle\"><strong>Fed reversal<\/strong><\/h3>\n<p>As a safe-haven asset, investors gravitate towards the yellow metal during times of market uncertainty and in hopes that it will act as a  hedge against inflation.\u00a0But because gold doesn&#8217;t yield anything, the metal is also especially sensitive to expectations for long-term, real interest rates.<\/p>\n<p>The Iran war, now in its fourth month, has fueled inflation by pushing energy and other prices higher.  <\/p>\n<p>U.S. consumer inflation in May increased at its fastest pace in three years in May, mainly from the surging prices of energy-related products.\u00a0Together with a stronger-than-expected May jobs reports, expectations have grown that the Fed may need to raise interest rates by the end of the year to slow down price increases.\u00a0<\/p>\n<p>Next week, the Federal Reserve is expected to hold its benchmark lending rate steady at 3.50% to 3.75%  during Kevin Warsh&#8217;s first meeting as Fed chair. A majority of \u2060economists in a Reuters poll expect interest rates to remain unchanged \u2060this year after many were penciling in multiple rate cuts to start the year.<\/p>\n<p>Traders less sanguine, and are currently pricing in a 67% chance of a Fed rate hike by December, according to the CME Group&#8217;s FedWatch tool. Higher rates, if they help stamp out inflation, can make dollar-denominated assets such as Treasury securities more attractive.\u00a0<\/p>\n<h3 class=\"ArticleBody-smallSubtitle\"><strong>The technical breakdown<\/strong><\/h3>\n<p>Based on price chart analysis, the overall technical picture for gold remains weak. <\/p>\n<p>Gold recently broke below its 200-day moving average for the first time since September 2023, which Citigroup flagged as a major negative signal. The bank has been cautious near-term on gold ever since the war escalated in March, partly due to higher energy costs springing from the closure of the Strait of Hormuz. <\/p>\n<p>Long-term, Citi was more bullish, however. &#8220;Despite the negative near-term momentum, we expect gold price to eventually rebound when the Strait situation deescalates,&#8221; its analysts said. <\/p>\n<p>JPMorgan is more pessimistic, saying retail and institutional investors have retreated from the so-called &#8220;debasement trade&#8221; based on a belief that the U.S. dollar would continue to depreciate. The bank cited outflows from gold exchange-traded funds and weaker futures positioning as evidence of the move, tied also to concern about the size of government debt, inflation and geopolitical risks.<\/p>\n<\/div>\n<div class=\"ArticleBody-googlePreferredSourceContainer\" data-module=\"GooglePreferredSource\" data-id=\"RegularArticle-GooglePreferredSource-5\">Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Gold bars are displayed in a photo illustration, reflecting recent movements in gold prices driven by inflation concerns and central bank policy outlooks in Brussels, Belgium, on December 23, 2025. (Photo by Jonathan Raa\/NurPhoto via Getty Images) Nurphoto | Nurphoto | Getty Images Gold fell to a fresh six-month low on Thursday as investors dump [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":4620,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[3445,983,3396,920,479,614,615,439,3444],"class_list":["post-4619","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog","tag-6month","tag-bullion","tag-favor","tag-fears","tag-gold","tag-heres","tag-inflation","tag-rise","tag-slumps"],"_links":{"self":[{"href":"https:\/\/www.finznest.com\/blog\/wp-json\/wp\/v2\/posts\/4619","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.finznest.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.finznest.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.finznest.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.finznest.com\/blog\/wp-json\/wp\/v2\/comments?post=4619"}],"version-history":[{"count":0,"href":"https:\/\/www.finznest.com\/blog\/wp-json\/wp\/v2\/posts\/4619\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.finznest.com\/blog\/wp-json\/wp\/v2\/media\/4620"}],"wp:attachment":[{"href":"https:\/\/www.finznest.com\/blog\/wp-json\/wp\/v2\/media?parent=4619"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.finznest.com\/blog\/wp-json\/wp\/v2\/categories?post=4619"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.finznest.com\/blog\/wp-json\/wp\/v2\/tags?post=4619"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}