Gold and Silver Tumble Together on Rate-Hike Fears
- Input
- 2026-06-24 03:05:17
- Updated
- 2026-06-24 03:05:17
Fears that the Federal Reserve System would raise interest rates sent gold and silver prices plunging.
Gold for August delivery fell $54.90, or 1.31%, from the previous session to $4,147.80 per ounce.
Silver, often called "the poor man's gold," slid $3.593, or 5.48%, to $61.99 per ounce for July delivery.
Gold, the classic safe-haven asset, has actually struggled since the war in Iran began on Feb. 28 after surprise airstrikes by the United States and Israel.
As Iran blocked the Strait of Hormuz, global oil prices surged and inflation began to heat up again. That has raised expectations of higher interest rates and pushed prices lower. Gold does not pay interest, so the opportunity cost of holding it rises when rates increase.
In particular, gold's weakness has deepened as Kevin Warsh, the Federal Reserve (the Fed) chair appointed by President Donald Trump to cut rates, has shown signs of shifting toward rate hikes.
Warsh took a hawkish stance at the Federal Open Market Committee (FOMC) meeting on the 16th and 17th, his first since taking office as Fed chair. Market expectations are now widespread that rates will rise by year-end.
BofA even forecast that the Fed could raise rates three times this year, in September, October and December.
Investment banks on Wall Street are increasingly turning pessimistic on gold as the market landscape shifts.
According to CNBC, BofA commodity strategist Michael Widmer said in a note on the 19th that the previous year-end target of $6,000 per ounce now looks unlikely. He said gold has become less favorable as monetary policy moves toward tightening.
Deutsche Bank AG also cut its gold target in a note on the 23rd, saying that "the hawks are driving out the gold bulls." The bank added that if the Fed keeps rates unchanged in the third quarter, gold could reach $4,300 per ounce. If the Fed raises rates three to four times, it warned, gold could fall as low as $3,800 per ounce.
dympna@fnnews.com Song Kyung-jae Reporter