Gold prices fell sharply on Friday, putting the metal on course for a third consecutive weekly loss. Spot gold dropped as much as 2.1% to $4,121.95 an ounce, its lowest level since 11 June, and was down nearly 4% for the week. The dollar hovered around a one-year high, making bullion more expensive for holders of other currencies and amplifying the downward pressure.

The catalyst was the Federal Reserve’s policy meeting under new Chairman Kevin Warsh. Although the central bank left its policy rate unchanged in the 3.50%–3.75% range, updated projections showed nine of 19 policymakers now expect a rate increase this year. Market-implied odds of a December hike surged to 87%, from 61% before the decision, according to the CME FedWatch Tool. Higher interest rates diminish the appeal of gold, which yields no income. Goldman Sachs cut its year-end price forecast to $4,900 an ounce from $5,400, citing the diminished likelihood of a rate cut. Sydney-based analysts noted that the Fed’s newly hawkish tone had “neutralised the geopolitical tailwind”, reminding markets that monetary policy remains the dominant driver.

Geopolitical developments provided only fleeting support. An interim U.S.-Iran peace deal took effect, allowing oil tankers to transit the Strait of Hormuz and prompting Washington to lift its blockade. However, planned talks in Switzerland were called off after Vice President JD Vance cancelled his trip, leaving the durability of the truce uncertain. In physical markets, demand was modest in India and top consumer China flipped to a discount, while the closure of mainland Chinese and Hong Kong markets for a holiday thinned trading activity. Other precious metals tracked gold lower: spot silver fell as much as 3.9%, platinum lost 2.7%, and palladium shed 2.3%.

The next concrete milestone arrives on Monday, when the Dubai Commodities Exchange launches a same-day settlement gold futures contract, aiming to attract safe-haven flows with faster trading infrastructure. Markets will also watch for any rescheduling of U.S.-Iran negotiations and further Fed commentary that could firm up the timing of monetary tightening.