(Kitco News) – Gold prices saw another turbulent week, as early safe-haven support faded into a sharp midweek selloff after hotter U.S. inflation data, renewed Middle East fighting, and rising Fed rate-hike expectations pushed prices to the $4,000 support level before the yellow metal reclaimed $4,200 on a late-week bounce.
Spot gold kicked off the week trading at $4,327.46 per ounce on Sunday evening, and prices pushed higher into Tuesday as traders continued to monitor the U.S.-Iran conflict and the risk of further disruption in the Strait of Hormuz. But the rally stalled after Iran signaled an end to its military operations against Israel, cooling some of the immediate geopolitical fear premium, and gold ultimately set its weekly high at $4,362.94 per ounce on Tuesday before sellers took control.
The reversal accelerated Wednesday after U.S. CPI rose 4.2% year-over-year in May, its fastest pace since 2023, while renewed fighting in the Middle East drove oil prices higher and revived concerns that energy inflation could force the Federal Reserve to stay hawkish. Gold broke sharply lower through $4,200 and set its weekly low at $4,023.10 per ounce on Wednesday, its weakest level since late 2025.
The metal recovered some ground Thursday despite rising wholesale prices adding to the downbeat inflation narrative, with the Producer Price Index rising 1.1% in May and 6.5% from a year earlier, the largest annual increase since November 2022. Friday brought another attempt to stabilize the yellow metal as hopes for a potential U.S.-Iran deal helped push Treasury yields and the dollar lower, but the rebound remained limited after the week’s inflation shock.
After failing to reclaim $4,250, spot gold closed the week at $4,210.52 per ounce for another week in the red.
The latest Kitco News Weekly Gold Survey showed Wall Street indecisive and retreating to the fence ahead of the Fed, while Main Street sentiment slid into bearish territory after gold’s fall to the edge of $4,000.
“Gold reached near $4024 in the spot market this week, its lowest level since last November,” noted Marc Chandler, managing director at Bannockburn Global Forex. “The bounce in the last couple of days helped it recover to about $4246.50, which corresponds to the 38.2% retracement of the losses since the late May high near $4600. The momentum indicators are stretched but have not turned.”
“Several G10 central bank meetings next week. Only the BOJ to hike,” Chandler added. “New era at the Fed as Warsh presides over his first meeting and new dot plot. I would be more inclined to add on to gold holding on a new low.”
“Up,” said Adrian Day, president of Adrian Day Asset Management. “The probability, though not overwhelming, is that gold has hit its lows. As the Iran conflict draws to its close, the dollar will lose some of its safe-haven bid and that will be positive for gold. Equally, a fallback in the oil price will reduce some of the pressure for rate hikes. The ECB has already raised a key interest rate, but with the new chairman, the Fed is unlikely to follow suit, probably holding rates steady. Though this scenario does not argue for an immediate and forceful recovery, it does suggest higher rather than lower prices.”
David Morrison, senior market analyst at Trade Nation, is bearish on gold in the near term. “Should a peace deal be agreed, and should this lead to a significant drop in the US dollar (by no means guaranteed) then gold may pick up as sentiment towards it improves once again,” he said. “But for now, despite yesterday’s strong rally, it remains in the danger zone.”
“Up,” said Rich Checkan, president and COO of Asset Strategies International. “$4,000 held as gold bounced higher today. President Trump is assuring there is a peace deal. Tehran is silent on the issue. If there is one, gold goes higher next week. If there isn’t one, gold probably still goes higher next week… just not as far. We will see mid-week gyrations in price as a result of the Federal Open Market Committee meeting, the first under Chairman Warsh. But next Friday will see higher prices as the Federal Reserve leaves rates unchanged… despite CPI at 4.2% and PPI over 6%.”
Daniel Pavilonis, senior commodities broker at StoneX Group, told Kitco News that his analysis of oil prices suggests the bottom may be in for the metals, especially now that an Iran deal seems imminent.
“We found some risk on yesterday into today. Probably this unwind of everything that's going on in Iran and lower oil prices, which translates into possibly lower interest rates.”
“Gold looks like it’s going back down to $3,800, and we've got some risk on here,” he added. “It seems like the markets look like they're going to go a certain direction, they get close to it, and they start to reverse – at least that's the way that equities have been. So maybe the metals are starting to turn around here, and they can become more bullish.”
“But let's see if this deal actually gets signed, because the back and forth is really just causing everything across the board to come off.”
Pavilonis said the real tell for the broader market’s direction might have been oil all along.
“If you look at a continuous chart of oil, it really made its high back in March,” he said. “That's when it hit $120, and it hasn't been able to make a new high since then. In fact, the market looks like it's making lower highs and rolling over. So maybe things really ended then, but the interest rates really continued to move higher across the curve, especially in the 30-year and the 2-year. If that starts to calm down and rates start to back off, then I think we could see more risk on.”
Pavilonis said that even in the current high-rate environment, gold may be able to make gains, because precious metals are now undervalued relative to the white-hot equities market – and those equities may be overvalued as well.
“There's still that underlying opportunity that maybe the metals are underpriced from where they should be, especially with the pullback and with ETF trading,” he said. “If you look at it from that perspective, there still could be a lot of momentum for buying. All of the same themes from prior to the Iran war are still intact. We're still in a ton of global debt. Everybody's rushing into stocks. At some point, there's going to be a massive reversal, maybe on a scale that we haven't seen in a very long time.”
“The thing about equities is it has that AI theme behind it, so there's a story on what's driving it,” he added. “Where is the story on what's driving gold right now? This could be a dead cat bounce, but those stories become sticky, and people start to flock to it, and start to navigate a trade setup that has a lot of potential.
“Right now, we're seeing gold move higher, but where's the interest in some kind of story that's unfolding, that has potential to drive this thing up to $8,000,” he mused. “That, I think, is the missing piece of the puzzle.”
This week, 17 analysts participated in the Kitco News Gold Survey, with Wall Street flipping from three-quarters bearish to three-quarters confounded after gold bent but didn’t break. Four experts, or 24%, expected to see gold prices gain ground during the week ahead, while two others, or 12% of the total, predicted a price decline. The lion’s share of analysts – 11, or 65% – chose to stand aside and await the Fed’s direction.
Meanwhile, 70 votes were cast in Kitco’s online poll, with Main Street investors succumbing to bearish sentiment after gold’s downbeat performance. 27 retail traders, or 39%, looked for gold prices to rise next week, while another 34, or 49%, predicted the yellow metal would lose ground. The remaining nine investors, representing 13% of the total, thought gold prices could go either way in the coming week.
Central banks take center stage next week, with incoming Federal Reserve chair Kevin Warsh’s first FOMC meeting top-of-mind for traders, but markets will also be watching key retail, housing and manufacturing data.
The week kicks off with the Monday morning release of the Empire State Manufacturing Survey, with the Bank of Japan’s monetary policy decision coming overnight, followed by the Reserve Bank of Australia early Tuesday morning. Tuesday will also see the publication of housing starts and building permits for May.
Then on Wednesday morning, traders will be watching U.S. retail sales and pending home sales for May, before market participants gear up for the Federal Reserve’s monetary policy decision and new chair Warsh’s first presser in the afternoon.
Thursday morning will see the monetary policy decisions of the Swiss National Bank and the Bank of England, followed by the Philly Fed Manufacturing Survey and weekly jobless claims data.
U.S. markets will be closed on Friday for the Juneteenth holiday.
“I am bullish on gold for the coming week,” said Colin Cieszynski, chief market strategist at SIA Wealth Management. “Technically, gold successfully retested support near $4,000 and has been bouncing back, it appears a new upswing has started. If we get a peace deal and oil continues to fall back, inflation and rate hike concerns could ease, which could be beneficial for precious metals.”
Darin Newsom, senior market analyst at Barchart.com, told Kitco News that under the present circumstances, any attempt to gauge the direction of the precious metals market is a fool’s errand.
“The gold market is neither technical nor fundamental, it's a different entity right now,” he said. “What we have are central banks continuing to buy and investors and traders continuing to sell despite the fact that we have geopolitical problems. Gold has traditionally been the safe-haven market, but it's not acting that way right now. The inflation numbers that we saw this week should have brought some buying back into gold, but gold doesn't go up unless crude oil comes down, and crude oil only comes down on misinformation supplied to the market via the U.S. President.
“So it's not fundamentally driven, it's not technically driven, it's just driven,” Newsom said. “It's that third school of analysis, and that is figuring out algorithms – not worried about fundamentals, not worried about technicals, but just what is it that triggers algorithms to move one day to the next. And it's misinformation disguised as headlines.”
In this environment, Newsom doesn’t think round numbers and other psychological levels matter very much. “$4,000, just a number; I don't think algorithms care about that,” he said. “Maybe if we look out far enough, to 100-day, 200-day moving averages, there may be something there. But what I see right now is the investment side's getting out, while the central banks continue to buy on these sell-offs, so you have a bit of a stalemate here.”
In terms of interest rates and the Federal Reserve’s monetary policy, Newsom pointed out that markets are pricing in a rate hike, but only later in 2026, and he doesn’t think Trump’s new Fed chair will raise rates until after the midterms.
“If rates aren't allowed to go up, stock markets will rally,” he said. “There will still be this over-inflated view from investors that, ‘Hey, we're not going to see a rate increase,’ and we're going to get these stocks completely out of line with their actual values.”
“Because of the instability that it's going to continue to create, that would bring buying back into gold,” Newsom said. “So I think at some point here, maybe in the second half, maybe the third to fourth quarter of 2026, we start to see some of this investment money that's leaving the gold market start to come back in. But right now, the hot play has been the energy sector, to bet on inflation, rather than gold to protect against it.”
Alex Kuptsikevich, senior market analyst at FxPro, expects gold prices to decline further next week.
“Gold began the week with a sharp sell-off, easily attributable to both fundamental and technical factors,” he said. “On the fundamental side, the main driver was a further increase in the likelihood of policy tightening by the world’s major central banks. On the technical side, the break below the 200-day moving average confirmed the breakdown of the long-term uptrend that occurred at the end of January. Weakening equity markets also weighed on gold. Geopolitical tensions also weighed on gold in the first half of the week, but turned in its favour in the second half as appetite for risk assets recovered, causing the price per ounce to rebound from 4,023 to 4,243 in less than a day.”
But Kuptsikevich said there is another way to look at global gold dynamics. “By falling to 4,000, gold completed a correction of its three-year rally, clearing the way for further gains for several years to come,” he said. “The potential for a new round of growth is a surge to 8,000 over the next two to three years. However, we will treat this scenario as secondary for the next few weeks or even months, until we see prices return above 5,000. Until then, we maintain the view that gold will move towards the 3,000–3,300 range by the end of the first quarter of next year.”
Analysts at CPM Group have issued a Stand Aside recommendation between June 12 and 24, and they see the potential for a wide range between $3,800 - $4,650.
“Gold prices have fallen approximately 12% in the nine trading days from an intraday high of $4,627.10 at the end of May to an intraday low of $4,046.00 today, before recovering to trade around $4,235,” they wrote. “The short-term outlook for gold is for prices to continue the downward trend since 29 January, finding support at gold prices above $3,800, i.e. at levels never experienced prior to September, in the last nine months. CPM has projected a wide, volatile consolidation period from May through August, with the projection of a potential spike to $3,800 during this period of time. While CPM perhaps expected the low more likely in July or August, it could emerge sooner given the extent of investor liquidation over the past few weeks.”
“Our analyses suggest that gold could drop $400 from current levels to $3,800 over the next two weeks, and it could easily rise to around $4,650,” they warned. “While some of our analysts favor staying short on an ultra short term basis, riding the present trend, others feel the risk:reward between further declines or a rebound are about even, per the price range cited here. The majority view is to take profits and stand aside, at least for a couple of days.”
“On the downside, the Fed’s FOMC is meeting next week, and is likely to maintain current Fed Funds interest rates, or possibly raise them given the higher CPI and PPI data released 10 and 11 June. Also, the U.S. Iran war continues to threaten global economic activity,” the analysts said. “On the upside, the war continues and inflationary pressures are increasing.”
At the time of writing, spot gold last traded at $4,218.56 per ounce for a loss of 2.38% on the week and 0.17% on the day.
