(Kitco News) - Gold investors may want to get comfortable, as prices are expected to continue trading within a volatile range due to persistent economic and geopolitical uncertainty.
With gold prices currently neutral, analysts anticipate the precious metal will remain confined within its current monthly range, with support at $3,100 an ounce and resistance at $3,400.
Sentiment has shifted as gold now trades in the middle of that range. Spot gold was last seen at $3,292.81 an ounce, down nearly 2% on the week.
Despite the weekly decline, spot gold has eked out a marginal gain for the month, extending its winning streak to five consecutive months. However, in the futures market, the precious metal's rally has come to an end, with gold closing the month $2 lower.
What makes this month’s price action notable is the elevated volatility. May’s intramonth swing reached $324.90—down from April’s record-setting $539.50 but still well above the 20-year average of approximately $89 an ounce.
Analysts note that while gold retains strong long-term fundamentals supporting its uptrend, near-term volatility is sapping its momentum.
“It’s not surprising to see this volatility in gold—it reflects the chaos in U.S. government policies. They are all over the place,” said Chantelle Schieven, Head of Research at Capitalight Research.
Schieven added that she expects gold prices to remain in a holding pattern through the summer as investors await the full impact of President Trump’s ongoing trade war.
“Gold prices will end the year higher, but for now, the market is in a holding pattern,” she said. “It’s going to take six to eight months before we see the full effects of all his policies on prices and what that means for the economy.”
These comments come amid muted inflation data. Over the past 12 months, the core Personal Consumption Expenditures (PCE) Index showed inflation rising 2.5%, down from March’s revised reading of 2.7%.
While consumer price pressures have eased slightly, one-year inflation expectations remain elevated, still above 6%.
“Gold’s dramatic surge—nearly 60% since 2024—is driven by a mix of macroeconomic and geopolitical factors,” said Eugenia Mykuliak, Founder & Executive Director of B2PRIME Group. “Chief among them is uncertainty around inflation and monetary policy. Yes, a disinflationary impulse may be taking hold in Q1, but concerns over trade policy, tariffs, and U.S. fiscal health are raising fears of stagflation.”
Although gold may not revisit last month’s all-time high of $3,500 an ounce anytime soon, some analysts believe there is still room for solid gains as a new trading month begins next week.
This week’s volatility and selling pressure were partly triggered by a panel of federal judges striking down President Trump’s tariffs enacted last month. Analysts caution that this ruling may only increase trade uncertainty and exacerbate the global trade conflict.
Thu Lan Nguyen, Head of FX and Commodity Research at Commerzbank, noted that Trump could still challenge the ruling or find a way around it.
“Uncertainty in the trade conflict is therefore likely to remain high until negotiations are finalized, meaning demand for gold—which is considered a safe haven—should also remain elevated,” she said.
While gold may not be ready to revisit record highs in the immediate future, bearish sentiment in the market remains minimal.
“Downside pressure on the precious metal is limited by ongoing tariff uncertainty, heightened geopolitical tensions, and growing concerns about the global economic outlook,” said Ricardo Evangelista, Senior Analyst at ActivTrades. “Additionally, fiscal risks stemming from the U.S. administration’s proposed tax-cutting bill are fueling investor caution. Amid so many unknowns, gold’s status as a haven asset will likely continue offering support around the $3,300 mark.”
Although gold appears stuck in a holding pattern, volatility is expected to remain elevated next week with the release of key economic data. The highlight will be Friday’s nonfarm payrolls report, though markets will also monitor employment and manufacturing figures throughout the week.
Analysts continue to look for signs of cooling in the labor market, a factor that could prompt the Federal Reserve to reconsider its neutral policy stance.
Mykuliak said he is also closely watching inflation data:
“In the near term, if U.S. CPI data on June 11 surprises to the upside or geopolitical tensions escalate, gold could push toward $3,400—possibly even testing the psychological $3,500 level,” he said. “The metal has updated a new ATH. Conversely, if the Fed maintains its hawkish tone and macro data remains strong, consolidation below $3,300 is likely. Key support now lies at $3,215, with a deeper retracement possible.”
Weekly economic data to watch:
Monday: ISM Manufacturing data
Tuesday: US JOLTS job openings
Wednesday: US ADP employment, Bank of Canada monetary policy decision, ISM services data
Thursday: European Central Bank monetary policy meeting, US weekly jobless claims
Friday: US nonfarm payrolls
