Gold rebounds above $4,000 after worst quarter in 13 years

Gold clawed back above $4,000 per ounce on Wednesday after briefly touching its lowest level since November 2025, capping what Reuters ↗ 5.06% described as the metal's worst quarterly decline since the second quarter of 2013. The precious metal fell roughly 14% over the April-to-June period and has now shed nearly 29% from its January all-time high above $5,500, battered by a hawkish Federal Reserve under new Chair Kevin Warsh, rising Treasury yields, a surging dollar, and fading geopolitical risk.reuters+2

A Perfect Storm Against Bullion

Spot gold slipped as low as $3,942 on Monday before recovering, according to market data, while August futures settled near $4,038 on Tuesday. The sell-off in June alone stripped more than $500 from the price — roughly 12% — making it the worst month since June 2013, according to The Wall Street Journal News Corp ↗ 3.15%.finance.yahoo+2

The headwinds are well-documented. The Warsh-led Fed has held rates at 3.50% to 3.75% since December 2025, and swap markets now price in a nearly 70% probability of a rate hike by September. The U.S. Dollar Index has surged to 14-month highs, while 10-year Treasury yields have climbed to around 4.46%. Meanwhile, progress on a U.S.-Iran military pause has drained the geopolitical risk premium that helped propel gold to records earlier in the year.usagold+2

JPMorgan Chase ↗ 0.12% noted a widespread retreat from the "debasement trade" by both retail and institutional investors.cnbc

Analyst Views and the Floor Beneath

Goldman Sachs The Goldman Sachs Group, Inc. ↗ 0.14% cut its year-end gold target by $500 to $4,900 per ounce in mid-June, citing the vanishing prospect of rate cuts. JPMorgan maintained its outlook for gold to average $6,000 per ounce in the final quarter of 2026. Carley Garner of DeCarley Trading told Kitco News she expects gold to establish a "durable bottom between $3,700 and $3,600 an ounce," levels she views as a healthier reset after the powerful advance.jpmorgan+4

Central bank demand continues to provide structural support. The World Gold Council's 2026 survey, released June 16, found that central banks have averaged 1,000 tonnes of annual gold purchases for four consecutive years, with a record 45% planning to increase holdings further. Net purchases in the first quarter of 2026 reached 244 metric tonnes, up 3% year-over-year.goldsilver+1

What Comes Next

The near-term outlook remains clouded. Warsh is scheduled to speak Wednesday at the ECB Central Banking Forum in Sintra, Portugal, and the market will be watching closely for signals on rate policy. Key U.S. labor data later this week could either reinforce or soften expectations of a September hike.xtb

"Gold continues to hold support around $4,000 an ounce, but it's only a matter of time before the precious metal heads lower as it faces challenging headwinds from a stronger U.S. dollar," Garner told Kitco News.kitco