Gold futures on the New York Mercantile Exchange saw a decline on August 26, with the most actively traded December 2026 contract falling $46.7 to settle at $4,647.80 per ounce, a drop of 0.99%. The decrease was driven by U.S. economic data that largely met expectations and inflation still hovering near the 4% threshold, at one point pushing gold down more than 1.37% during the session.

The U.S. Commerce Department's Bureau of Economic Analysis (BEA) released its second estimate for second-quarter 2026 GDP on August 26, showing the annualized quarterly real GDP growth rate held steady at 1.5%, marking a notable slowdown from the 2.1% pace recorded in the first quarter. Meanwhile, the July PCE price index rose 3.7% year-over-year, slightly above the market consensus of 3.6% and unchanged from June, while the month-over-month increase came in at 0.2%, exceeding the anticipated 0.1%.

Following the data release, market expectations for a Federal Reserve rate hike by the end of 2026 strengthened, with the probability of a December rate increase nearing 77%. Against this backdrop of rising expectations for higher interest rates, U.S. Treasury yields resumed their upward trajectory.

Analysts suggest that gold's recent pullback has not significantly undermined its long-term investment appeal. With sovereign debt concerns once again taking center stage in global financial markets, the prospect of gold reaching the $5,000 per ounce target by year-end remains highly achievable.

On the same day, silver futures for September delivery dropped 59.5 cents to close at $68.875 per ounce, reflecting a decline of 0.86%.