Gold prices extended their decline for a third consecutive session, with COMEX futures settling at $4,172.90/oz on Friday. The drop accelerated after the metal broke below the $4,200 psychological level mid-week, a threshold that had held since early June.
The sell-off was driven by a stronger U.S. dollar index, which gained 0.8% on the week as stronger-than-expected retail sales data prompted traders to push back expectations for the first Federal Reserve rate cut. Markets now see a September 2026 cut as uncertain, with odds falling to 48% from 65% a week ago.
Central bank buying, a key support for gold in 2025, has also moderated. Preliminary data from the IMF's COFER database suggests sovereign purchases slowed in Q2 2026 after a record 1,045 tonnes in 2025. Poland, China, and Kazakhstan remain net buyers but at reduced volumes.
ETF outflows added to the pressure. Global gold-backed ETFs reported net outflows of 18.3 tonnes in the week ending June 19, according to the World Gold Council, following a 12-tonne outflow the prior week. Managed money positions on COMEX have also declined, with speculative long positions falling 8% in the latest CFTC reporting period.
Gold buyers should watch for a potential test of the $4,000-$4,050 support zone if the dollar continues to strengthen. For procurement teams with precious metals exposures, the current pullback represents an opportunity to lock in pricing if the medium-term bull case — central bank buying and geopolitical hedging — remains intact. Consider layering in hedges at $4,050-$4,100 levels.