Gold was on track for a fourth straight week of losses as of June 25, 2026. The trigger: inflation data and betting markets now price in an 80% chance the Federal Reserve will raise interest rates in December, according to Reuters.

A four-week losing streak is notable for an asset that drew investors seeking safety for much of the past year. Here's the mechanism: gold doesn't pay interest or dividends. When interest rates rise, holding gold becomes more costly — you give up the gains you could earn in a savings account or bond. That trade-off tightens as the odds of higher rates increase.

The inflation number is the real story. The Fed's preferred inflation measure, the PCE, came in at 4.1% year-over-year through May. That's more than double the Fed's 2% target. As long as inflation stays that high, the Fed has no reason to cut rates soon. Traders have adjusted their bets accordingly, and gold is paying the price.

Bloomberg reported gold was holding near the $4,000 level as of June 25 — a psychologically important mark that traders and investors watch closely as support if selling pressure continues.

The stronger U.S. dollar adds another layer. A hawkish Fed (one expected to raise rates) strengthens the dollar. Since gold is priced in dollars, a stronger greenback makes it more expensive for buyers outside the U.S., reducing demand and pushing prices lower.

What the 80% probability actually means matters. Fed futures markets are deep and liquid — real money at real prices, not surveys or guesses. But that 80% is not a prediction of the future. It's the market's current price for the bet. If inflation reports soften in the coming months, traders will quickly reprrice that probability downward, and gold could recover just as fast. Right now, rate expectations are driving the market, not a fundamental change in gold's role as a hedge or store of value.

Four consecutive weeks of decline deserves perspective. Gold's selloff is happening from historically high levels — the $4,000 mark itself was a record not long ago. A correction from those heights, driven by traders rethinking the path of monetary policy rather than a panic unwind or fund liquidation, is different from a bear market. That distinction may not comfort those who bought near the top, but it signals the gold market itself is intact. It's repricing to a world of higher interest rates for longer — a scenario the inflation data now supports.

For those watching rates markets, the December hike probability will be the crucial variable through summer. Each PCE and inflation report released before the Fed's November meeting will either strengthen or weaken that 80% figure, and gold will trade it in real time. For commodity traders, the $4,000 support level and the dollar's trajectory are the immediate reference points. Neither the rates market nor the gold market should settle quickly. Inflation at 4.1% doesn't solve itself in one month.