Gold Is Under Pressure Today: What's Going On? - SPDR Gold Shares (ARCA:GLD)

SPDR Gold Shares (NYSE:GLD) are dipping on Tuesday. Expectations for additional Federal Reserve rate hikes rise and geopolitical tensions ease.

SPDR Gold Shares stock is showing weakness. Why is GLD stock trading lower?

Rate Hike Expectations Weigh On Gold

Bank of America shifted to a sharply more hawkish outlook. The bank told clients Monday that it now expects the Federal Reserve to raise interest rates by a total of 75 basis points before the end of 2026. Economist Aditya Bhave outlined a path that includes three consecutive 25 basis point increases in September, October and December.

That sequence would lift the federal funds rate to a range of 4.25% to 4.5%, which is about 25 basis points higher and three months earlier than current market pricing. Bank of America now holds one of the most aggressive rate forecasts among major Wall Street institutions.

The call follows a June FOMC meeting that leaned more hawkish than expected under new Fed Chair Kevin Warsh. Bank of America interprets the meeting as a sign that policymakers are placing greater weight on inflation risks. Bhave said the data now argue for rate increases and described the shift as moving from risk management to supply shock management. Core PCE inflation could reach 3.5% in May, which would be about 70 basis points higher than a year earlier.

Higher interest rates typically hurt gold because the metal pays no yield and becomes less attractive compared with interest-bearing assets. A stronger U.S. dollar, which often benefits from a rate hike cycle, also tends to pressure gold prices.

Easing Geopolitical Tensions Reduce Safe Haven Demand

Gold may also be losing some of its safe-haven appeal as geopolitical tensions ease. Iran’s Foreign Minister Seyed Abbas Araghchi said Sunday that the United States will lift its naval blockade of the Strait of Hormuz following the conclusion of talks in Burgenstock, Switzerland.

A joint statement from Pakistani and Qatari mediators described the creation of a political oversight committee and a de conflict unit for Lebanon, with all parties agreeing to a roadmap aimed at reaching a final agreement within 60 days. As the peace process advances, the conflict-driven demand that previously supported gold has diminished.

GLD Shares Are Falling

GLD Price Action: SPDR Gold shares were down 1.45% at $379.00 at the time of publication on Tuesday, according to Benzinga Pro.

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