Gold price extends losses into fourth consecutive week: Is the safe-haven bid finally cracking?

Gold prices have slipped for a fourth consecutive week, marking one of the longest losing streaks for the precious metal in recent months. The decline has raised questions among investors about whether the traditional safe-haven bid is losing its grip as macroeconomic conditions shift.

As of Friday’s close, spot gold was trading near $2,330 per ounce, down approximately 3.5% over the past four weeks. The persistent sell-off comes despite ongoing geopolitical tensions and lingering inflation concerns, which typically support gold demand.

What is driving the decline?

The primary catalyst appears to be a reassessment of Federal Reserve interest rate expectations. Stronger-than-expected U.S. economic data, including robust job creation and sticky services inflation, have pushed back market expectations for rate cuts. The CME FedWatch Tool now shows a less than 50% probability of a rate cut before September, compared to over 70% a month ago.

Higher-for-longer interest rates increase the opportunity cost of holding non-yielding assets like gold. At the same time, the U.S. dollar has strengthened, with the DXY index rising to a five-month high above 106. Since gold is priced in dollars, a stronger greenback makes the metal more expensive for foreign buyers, further weighing on demand.

Safe-haven demand under pressure

Gold’s traditional role as a safe haven is being tested. While geopolitical risks — including the ongoing conflict in Ukraine and tensions in the Middle East — remain elevated, investors have increasingly turned to the U.S. dollar and Treasury bonds as preferred havens. The 10-year Treasury yield has climbed back above 4.5%, offering a competitive real yield that draws capital away from gold.

Central bank buying, which provided a strong floor for gold prices in 2023 and early 2024, has also moderated. Data from the World Gold Council shows net central bank purchases slowed to 95 tonnes in the first quarter of 2025, down from 121 tonnes in the same period last year.

What this means for investors

For retail and institutional investors, the current environment suggests that gold may face continued headwinds in the near term. However, analysts caution against reading too much into a four-week decline. Gold remains above its 200-day moving average, and the broader uptrend that began in late 2023 is still intact.

If the Fed eventually signals a pivot toward easing — perhaps in response to a slowdown in consumer spending or a softening labor market — gold could regain its safe-haven appeal quickly. Additionally, any escalation in geopolitical conflicts could reignite demand for physical gold and exchange-traded funds.

Conclusion

Gold’s four-week losing streak reflects a market caught between competing forces: a strong dollar and hawkish Fed expectations on one side, and persistent geopolitical uncertainty on the other. While the safe-haven bid has weakened, it has not broken entirely. Investors should monitor upcoming U.S. inflation data and Fed commentary closely for clues about the next directional move in gold prices.

FAQs

Q1: Why are gold prices falling despite geopolitical tensions?
Gold prices are declining primarily because the U.S. dollar has strengthened and the Federal Reserve is expected to keep interest rates higher for longer, reducing the appeal of non-yielding assets like gold. Investors are currently favoring the dollar and Treasuries as safe havens.

Q2: How long could this gold price decline last?
The duration depends on economic data and Fed policy signals. If inflation remains sticky and the labor market stays strong, gold could face continued pressure for several more weeks. A shift in Fed rhetoric or weaker economic data could reverse the trend.

Q3: Is now a good time to buy gold?
That depends on individual investment goals and risk tolerance. For long-term holders, the current pullback may present a buying opportunity if they believe the broader uptrend will resume. Short-term traders should be cautious given the strong dollar headwind.