Gold Suffers Worst Monthly Drop Since 2008 – Fed Rate Jitters, Strong Dollar Fuel Selloff

• While ongoing dollar strength remains the primary headwind, investors will keep an eye on Federal Reserve Chair Kevin Warsh’s speech on Wednesday, according to Saxo Bank.
• The precious metal is down more than 7% so far this year and more than 24% since the U.S. – Israeli strikes on Iran on Feb. 28, 2026.
• Gold futures for August 2026 deliveries fell 1% at the time of writing.

Gold extended its slide on Wednesday, with spot prices posting their steepest monthly decline since October 2008 in June, as a stronger U.S. dollar and renewed expectations of an interest rate hike deepened the selloff in bullion.

Spot gold slipped below the psychologically important $4,000-an-ounce mark for a third straight session. At the time of writing, the XAU/USD was down 0.4% at $3,990.8 per ounce. Gold futures for August 2026 deliveries fell 1% to $3,998.30 per ounce.

All Eyes On Fed’s Kevin Warsh 

Investors will now turn their attention toward Federal Reserve Chair Kevin Warsh’s speech later in the day for fresh clues about the central bank's outlook and the future path of monetary policy.

“Gold slipped back below $4,000 as the market has yet to attract sufficient buying interest to establish that level as support. Ongoing dollar strength remains the primary headwind, while today’s focus is on what Federal Reserve Chair Kevin Warsh may signal during his speech in Sintra, Portugal,” a note by Saxo Bank read on Wednesday.

UBS analyst Giovanni Staunovo told Reuters that gold’s weakness was also fueled by comments from Federal Reserve Bank of Cleveland President Beth Hammack, who said she could support higher interest rates if inflation pressures do not ease.

According to the CME FedWatch tool, markets are pegging a 66.3% probability that the Federal Reserve will keep interest rates unchanged in July. However, the expectations shift in September, with traders pricing in a 50% chance of a 25-basis-point rate hike.

Middle East Risk Premium Continues To Unwind 

The precious metal fell more than 7% in the first half of the year. Although Gold staged a strong rally earlier in 2026, the momentum quickly faded after the U.S. and Israel launched strikes on Iran on Feb. 28, triggering a surge in fuel prices and rattling global financial markets. 

Since the conflict erupted in the Middle East, spot gold prices have tumbled more than 24%.

GLD: What Traders Are Watching Next 

Despite the decline, retail sentiment surrounding the SPDR Gold Shares ETF (GLD) remained in the ‘bullish’ zone on Stocktwits over the past 24 hours.

One user expects spot gold price to rebound if it falls below $3,900 per ounce.

Shares of major gold miners Barrick Mining Corp (B) and Newmont Corp. (NEM) fell 0.6% and 1.2%, respectively, in pre-market trading.

The SPDR S&P 500 ETF (SPY), which tracks the S&P 500 index, was down 0.2%, the Invesco QQQ Trust ETF (QQQ) fell 0.4%, while the SPDR Dow Jones Industrial Average ETF Trust (DIA) declined roughly 0.2%.

Also read: Nasdaq, S&P 500, Dow Futures Slip After Historic First-Half Rally As Investors Await Labor Data, Fed Signals: Why NKE, TSLA, NIO, MU, LUNR, CVKD Are In Focus

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