Gold prices continued their downward trajectory on Thursday, hovering near the more-than-seven-month low established the prior day, as the dollar sustained its strength in light of rising expectations for interest rate increases by the Federal Reserve. Spot gold experienced a decline of 0.4%, settling at $3,985.89 per ounce as of 0043. This follows a decrease that brought it to its lowest level since November 2025 on Wednesday. U.S. gold futures for August delivery experienced a decrease of 0.2%, concluding at $4,001.60. Bullion fell below the critical $4,000-per-ounce mark for the first time since November 2025 on Wednesday, driven by a strong dollar and expectations of interest rate hikes by the Federal Reserve.

Traders are forecasting three rate hikes from the Federal Reserve this year, with the CME FedWatch Tool suggesting a roughly 67% likelihood of an increase in September. The U.S. dollar appreciated for the third consecutive day on Wednesday, attaining a 13-month peak, consequently leading to heightened expenses for gold for buyers utilising alternative currencies. U.S. Treasury Secretary Scott Bessent on Wednesday expressed approval of Fed Chair Kevin Warsh’s strategy to diminish forward rate guidance, while emphasising the necessity for Fed policymakers to remain receptive to the inflationary consequences stemming from the Iran conflict.

Investors are paying close attention to the U.S. Personal Consumption data. Expenditures data, which serves as the Fed’s preferred inflation gauge, is set to be released later today, offering further insights into monetary policy. Lebanon and Israel are currently in negotiations concerning a U.S.-backed initiative that would facilitate the transfer of certain Lebanese territories, previously occupied by Israeli forces during their conflict with Hezbollah, to the Lebanese military.

Officials from both sides indicate that this could represent a significant move towards reinstating Lebanese sovereignty over the occupied areas. Spot silver declined by 0.2% to $57.33 per ounce, while platinum experienced a comparable decrease of 0.2% to $1,575.85. In contrast, palladium recorded an increase of 0.3%, reaching $1,170.25.