FXStreet reports—International gold prices exhibited a volatile trend this week, initially declining before rebounding, followed by a pause in the rally and consolidation at higher levels. After a sharp drop earlier tested the key support level at $4,000, a technical rebound emerged; however, upward momentum failed to sustain due to multiple fundamental constraints. Current market sentiment remains cautious, with major institutional funds continuing to wait for the final outcome of the peace agreement between the U.S. and Iran.
CoinTelegraph APP reports — This week, market catalysts centered on the U.S.-Iran geopolitical situation, becoming the key variable influencing short-term gold price fluctuations. U.S. President Trump publicly stated on Thursday that he had canceled plans for military strikes against Iran and sent a major signal that a U.S.-Iran peace agreement could be formally signed by the end of this weekend. This positive development significantly restored market risk sentiment, directly propelling gold to a strong rebound from its seven-month low of $4,023, while suppressing safe-haven buying and causing the US Dollar Index and international oil prices to weaken simultaneously. Subsequently, Iran’s Foreign Minister Abbas Araghchi corroborated the progress in negotiations, acknowledging that the U.S.-Iran memorandum of understanding had “never been closer to being finalized,” and urged the media not to over-speculate on the details of the agreement, further stabilizing market expectations.
However, since the Iranian authorities have not yet officially announced the final resolution, the geopolitical利好 remains highly uncertain, causing market sentiment to quickly shift to观望, and gold prices failed to sustain Thursday’s rebound, falling into a sideways consolidation phase. Spot Gold is trading at approximately $4,200 per ounce, with an intraday high of $4,246; overall price volatility has narrowed, and bullish and bearish forces are approaching balance.
Apart from geopolitical tensions, U.S. inflation data and expectations regarding the Federal Reserve's monetary policy remain the key bearish factors suppressing gold prices. This week’s significant U.S. inflation data came in far above expectations, firmly reinforcing the market consensus that the Federal Reserve will maintain high interest rates for an extended period, continuing to weigh on gold, a non-yielding asset.
Data shows that the U.S. Consumer Price Index (CPI) rose 4.2% year-over-year in May, a notable increase from April’s 3.8% and the highest level since April 2023. Meanwhile, the Producer Price Index (PPI) increased 6.5% year-over-year in May, surpassing the prior reading of 5.7% and reaching its highest level since November 2022. The persistent high-inflation environment suggests that the Fed’s interest rate cutting cycle will be further delayed, with a potential for additional rate hikes. Persistently elevated borrowing costs continue to undermine gold’s appeal as an investment asset.
The latest University of Michigan consumer sentiment data released in the U.S. has further complicated market conditions. The June Michigan Consumer Sentiment Index rose to 48.9 from 44.8 in May, significantly exceeding the market expectation of 46, reflecting a modest improvement in U.S. household consumption sentiment. Meanwhile, market inflation expectations slightly declined, with the one-year inflation expectation falling to 4.6% and the five-year inflation expectation dropping to 3.4%, both below previous levels.
The fragmented data landscape has made market participants more cautious in their assessment of Federal Reserve monetary policy, while uncertainties surrounding the timing and terms of the U.S.-Iran agreement have further constrained the downside potential of the U.S. dollar index. As of the latest market data, the dollar index (DXY) has been trading in a narrow range near 99.78, with the relatively resilient dollar continuing to pressure gold, effectively locking in a two-week consecutive decline for precious metals.
Technical Analysis: The bearish trend remains unchanged; the short-term rebound is merely a weak correction
From a technical perspective, both the short-term and medium-term trends for spot gold are weak, and the primary downtrend has not yet reversed, with bullish momentum severely lacking. The current gold price continues to trade below the 20-day moving average (MA20), which is near $4,425.45, acting as a strong short-term resistance. All recent rallies are merely temporary technical retracements within the broader downtrend and do not indicate a reversal.
(Spot Gold Daily Chart, Source: E-HuiTong)
From the perspective of indicator dimensions, market buying momentum remains weak.
The Relative Strength Index (RSI) (14) stands at 36.14, indicating a weak zone, which visually reflects insufficient upward momentum for gold prices and weak bullish strength, with no clear oversold stabilization signal yet. The Average Directional Index (ADX) is currently at 64.83, entering the high-value range, indicating that the current downward trend remains strong.
Regarding the Bollinger Bands (BOLL), the current price is trading near the lower band ($4,144.49), with short-term rebound limited by the middle band ($4,425.45). The narrowing range has not altered the overall downtrend structure.
Regarding support and resistance levels:
Support levels: The short-term key support is located near the lower Bollinger Band at $4,144.49, while the previous low of $4,023.85 serves as strong support. The mid-term critical support remains firmly anchored at the $4,000 psychological round number, which combines powerful psychological and historical technical support. This level represents the final key defense for bulls, where institutional and retail buying is likely to concentrate, preventing further sharp declines.
Resistance levels: The first short-term resistance is at $4,425.45, where the Bollinger Band middle line coincides with the 20-day moving average. The second strong resistance is in the region of the Bollinger Band upper band at $4,706.41. Gold must decisively break through both of these resistance zones and hold above the MA50 ($4,586.82) to overcome the current weak momentum and reverse the medium-term downtrend.
Institutional view: Multiple negative factors have converged, and gold has not yet entered a clear rebound cycle.
TD Securities' strategy team released a recent research report stating that current high interest rate expectations from the Federal Reserve are firmly capping gold's upside potential, making it difficult for precious metals to build sustained upward momentum. The high real interest rates driven by persistent inflation continue to suppress the valuation of non-yielding precious metals, serving as the primary constraint on gold's rebound. Meanwhile, market positioning remains weak, with commodity trading advisors (CTAs) maintaining slightly net short positions; ongoing institutional short-selling continues to disrupt price action, significantly compressing gold's trading range and preventing any clear trend formation.
TD Securities further analyzed that current market fundamentals are mixed, with both bullish and bearish factors present. While expectations of easing U.S.-Iran geopolitical tensions and elevated energy prices have provided some bottom support for gold, preventing a one-sided collapse and effectively shielding the price from falling below the key $4,000 threshold and triggering a new wave of large-scale selling, the fragile framework of the peace agreement, persistent inflationary pressures, and the Fed’s hawkish monetary policy stance collectively indicate that gold has not yet escaped its weak position and is unlikely to initiate a definitive rebound in the short term, remaining in a broadly weak and range-bound trading pattern.
However, since the Iranian authorities have not yet officially announced the final resolution, the geopolitical利好 remains highly uncertain, causing market sentiment to quickly shift to观望, and gold prices failed to sustain Thursday’s rebound, falling into a sideways consolidation phase. Spot Gold is trading at approximately $4,200 per ounce, with an intraday high of $4,246; overall price volatility has narrowed, and bullish and bearish forces are approaching balance.
Apart from geopolitical tensions, U.S. inflation data and expectations regarding the Federal Reserve's monetary policy remain the key bearish factors suppressing gold prices. This week’s significant U.S. inflation data came in far above expectations, firmly reinforcing the market consensus that the Federal Reserve will maintain high interest rates for an extended period, continuing to weigh on gold, a non-yielding asset.
Data shows that the U.S. Consumer Price Index (CPI) rose 4.2% year-over-year in May, a notable increase from April’s 3.8% and the highest level since April 2023. Meanwhile, the Producer Price Index (PPI) increased 6.5% year-over-year in May, surpassing the prior reading of 5.7% and reaching its highest level since November 2022. The persistent high-inflation environment suggests that the Fed’s interest rate cutting cycle will be further delayed, with a potential for additional rate hikes. Persistently elevated borrowing costs continue to undermine gold’s appeal as an investment asset.
The latest University of Michigan consumer sentiment data released in the U.S. has further complicated market conditions. The June Michigan Consumer Sentiment Index rose to 48.9 from 44.8 in May, significantly exceeding the market expectation of 46, reflecting a modest improvement in U.S. household consumption sentiment. Meanwhile, market inflation expectations slightly declined, with the one-year inflation expectation falling to 4.6% and the five-year inflation expectation dropping to 3.4%, both below previous levels.
The fragmented data landscape has made market participants more cautious in their assessment of Federal Reserve monetary policy, while uncertainties surrounding the timing and terms of the U.S.-Iran agreement have further constrained the downside potential of the U.S. dollar index. As of the latest market data, the dollar index (DXY) has been trading in a narrow range near 99.78, with the relatively resilient dollar continuing to pressure gold, effectively locking in a two-week consecutive decline for precious metals.
Technical Analysis: The bearish trend remains unchanged; the short-term rebound is merely a weak correction
From a technical perspective, both the short-term and medium-term trends for spot gold are weak, and the primary downtrend has not yet reversed, with bullish momentum severely lacking. The current gold price continues to trade below the 20-day moving average (MA20), which is near $4,425.45, acting as a strong short-term resistance. All recent rallies are merely temporary technical retracements within the broader downtrend and do not indicate a reversal.
(Spot Gold Daily Chart, Source: E-HuiTong)
From the perspective of indicator dimensions, market buying momentum remains weak.
The Relative Strength Index (RSI) (14) stands at 36.14, indicating a weak zone, which visually reflects insufficient upward momentum for gold prices and weak bullish strength, with no clear oversold stabilization signal yet. The Average Directional Index (ADX) is currently at 64.83, entering the high-value range, indicating that the current downward trend remains strong.
Regarding the Bollinger Bands (BOLL), the current price is trading near the lower band ($4,144.49), with short-term rebound limited by the middle band ($4,425.45). The narrowing range has not altered the overall downtrend structure.
Regarding support and resistance levels:
Support levels: The short-term key support is located near the lower Bollinger Band at $4,144.49, while the previous low of $4,023.85 serves as strong support. The mid-term critical support remains firmly anchored at the $4,000 psychological round number, which combines powerful psychological and historical technical support. This level represents the final key defense for bulls, where institutional and retail buying is likely to concentrate, preventing further sharp declines.
Resistance levels: The first short-term resistance is at $4,425.45, where the Bollinger Band middle line coincides with the 20-day moving average. The second strong resistance is in the region of the Bollinger Band upper band at $4,706.41. Gold must decisively break through both of these resistance zones and hold above the MA50 ($4,586.82) to overcome the current weak momentum and reverse the medium-term downtrend.
Institutional view: Multiple negative factors have converged, and gold has not yet entered a clear rebound cycle.
TD Securities' strategy team released a recent research report stating that current high interest rate expectations from the Federal Reserve are firmly capping gold's upside potential, making it difficult for precious metals to build sustained upward momentum. The high real interest rates driven by persistent inflation continue to suppress the valuation of non-yielding precious metals, serving as the primary constraint on gold's rebound. Meanwhile, market positioning remains weak, with commodity trading advisors (CTAs) maintaining slightly net short positions; ongoing institutional short-selling continues to disrupt price action, significantly compressing gold's trading range and preventing any clear trend formation.
TD Securities further analyzed that current market fundamentals are mixed, with both bullish and bearish factors present. While expectations of easing U.S.-Iran geopolitical tensions and elevated energy prices have provided some bottom support for gold, preventing a one-sided collapse and effectively shielding the price from falling below the key $4,000 threshold and triggering a new wave of large-scale selling, the fragile framework of the peace agreement, persistent inflationary pressures, and the Fed’s hawkish monetary policy stance collectively indicate that gold has not yet escaped its weak position and is unlikely to initiate a definitive rebound in the short term, remaining in a broadly weak and range-bound trading pattern.