20.06.2026 14:30
Gold prices are entering the new week under pressure due to critical geopolitical developments in the Middle East and expectations that the US Federal Reserve (Fed) may re-enter a rate hike cycle. As global financial giants successively revise their gold forecasts downward, experts debate the impact of inflation concerns on safe-haven assets.
Gold investors, who closed the week with sharp declines, are focusing on the postponement of permanent peace negotiations in the Middle East and the Fed's hawkish policies. On Friday's close, spot gold fell 1.2% to $4,155, while domestically, gram gold ended the week at 6,205 TL. In parallel with the meltdown in gold, silver fell 1.2% to $64.90, while platinum and palladium also lost value similarly.
MIDDLE EAST NEGOTIATIONS POSTPONED, INFLATION CONCERNS PERSIST
The first development to dampen market risk appetite occurred on the geopolitical front. Critical talks between the US and Iran regarding a permanent agreement and Tehran's nuclear program were postponed due to renewed clashes in southern Lebanon. This postponement was seen as a negative signal for efforts to end the war in the region.
Meanwhile, despite oil-laden ships waiting in the Strait of Hormuz beginning to depart after a temporary agreement was signed during the week, traffic was observed to decrease again on Friday. Iran's statement that ships passing through the strait are subject to its permission raised tensions. Analysts note that the normalization of oil and LNG flows could take months, keeping global inflation concerns alive.
HAWKISH START FROM NEW FED CHAIRMAN WARSH
One of the biggest pressure factors on gold was Kevin Warsh, who has newly taken the helm at the US Federal Reserve (Fed). The hawkish stance of new Fed Chairman Warsh against inflation weakened gold, which yields no interest. Markets have begun pricing in potential negative effects of possible rate hikes on assets like gold.
Gold experts speaking to Bloomberg News stated that gold historically performs poorly before a potential first rate hike by the Fed, while emphasizing that uncertainty persists over whether a new rate cycle will begin, and that gold could regain value in the opposite scenario.
MAJOR BANKS LOWER GOLD FORECASTS
The possibility of the Fed returning to a high-rate path has forced global financial giants to quickly update their gold forecasts:
- Goldman Sachs: It became the bank that most clearly reflected the Fed's rate hike possibility and hawkish stance in its report. Goldman Sachs lowered its year-end spot gold forecast from $5,400 to $4,900.
- J.P. Morgan: In a report published in early June, it reduced its year-end average spot gold expectation from $5,708 to $5,243. Greg Shearer, Head of J.P. Morgan Commodities Research Group, emphasized that the biggest bear risk in markets is the Fed entering a rate hike cycle, and that if growth remains strong while inflation rises, the Fed will have to raise rates.
- UBS: The Swiss bank had previously taken action, revising its year-end spot gold forecast from $5,900 to $5,500 due to stubbornly high US bond yields.