(Kitco News) – Gold prices saw another wild week, as early bargain-hunting and safe-haven demand gave way to another sharp selloff after stronger U.S. data, sticky inflation, a firmer dollar, and rising Fed rate-hike expectations pushed the yellow metal back toward the $4,000 level, before a last-minute surge brought prices to the edge of $4,100.
Spot gold kicked off the week trading at $4,142.13 per ounce on Sunday evening, and the move carried gold to its weekly high at $4,220.82 per ounce on Monday morning, but the rally quickly faded as the U.S. dollar strengthened and markets continued to price in a more aggressive Federal Reserve response to inflation.
The selling accelerated Tuesday and Wednesday, with gold breaking below $4,100 and then briefly losing the $4,000 level as traders braced for Thursday’s U.S. data slate. Spot prices ultimately set the weekly low at $3,959.38 per ounce on Wednesday afternoon, after stronger Fed rate-hike expectations and technical selling overwhelmed residual safe-haven demand.
Gold attempted to stabilize on Thursday after the May PCE price index showed inflation rising 4.1% from a year earlier, while initial jobless claims fell to 215,000, reinforcing the view that the Fed still had little room to ease policy. Friday brought a stronger rebound as renewed tensions in the Strait of Hormuz pushed oil prices higher and revived some geopolitical demand, but the move was not enough to erase the week’s losses.
After failing to reclaim $4,100 decisively, spot gold finished the week trading around $10 from that level, seeing strong momentum into the close.
The latest Kitco News Weekly Gold Survey showed bears still the preponderant force on both Wall Street and Main Street, with a dwindling minority of both camps expecting gains next week.
“Unchanged, though ‘uncertain’ would be a better word,” said Adrian Day, president of Adrian Day Asset Management. “There are competing forces: the Iran conflict could erupt again, while the AI and tech sell-off may lead to a need for greater liquidity, particularly since margin debt is at all-time highs in the US stock market. Gold is the ultimate source of liquidity. In addition, the Federal Reserve is following other central banks in emphasizing the need to get inflation down.”
“On the other hand, the CPI numbers may decline over the next couple of months as lower oil prices feed into prices at the pump, and, even if only a temporary respite in inflation, would give the Fed and other banks a reason to not tighten monetary policy,” Day said. “Technically, we may see a retest of the mid-week lows before moving higher.”
“Sentiment remains cautious,” said Neil Welsh, head of metals at Britannia Global Markets, “but the broader backdrop still looks more like consolidation than capitulation.”
Darin Newsom, senior market analyst at Barchart.com, sees gold prices gaining ground next week.
“Why? Unless something changes over the weekend, fund money could continue to roll out of the Energies sector, looking for a new home,” he said. “Given global inflation is still a concern, leading central banks to continue buying gold, investors could start buying gold and silver again as well.”
“Technically, for what that’s worth, the August contract is oversold, possibly drawing the attention of algorithms,” Newsom added.
“Up,” said Rich Checkan, president and COO of Asset Strategies International. “Psychological support at $4,000 seems to be holding… with technical support just a hair lower at $3,800. This sell-off was overdone weeks ago, and I fully expect both individual investors and central banks to be buying gold with both hands at these sale prices.”
Jesse Colombo, independent precious metals analyst and founder of the BubbleBubble Report, told Kitco News that the tide is beginning to turn for gold and silver, and the Treasury market is what to watch.
“In March, gold and silver were selling off because oil prices were rising, which was increasing inflation expectations,” he said. “But now oil prices have been sinking, and yet precious metals have also been sinking alongside oil.”
Columbo said the precious metals market hasn’t really caught on to what’s beginning to happen in Treasuries, but he thinks it’s only a matter of time.
“Inflation expectations are actually dropping again,” he said. “So I'm wondering if that's going to flow through into Treasuries, and they're going to rise, yields will drop, and that's going to provide some relief to precious metals.”
Columbo said he’s been watching a major support zone in gold between $3,900 and $4,100, which was formed by the October-November lows. “So far, it looks like gold has bounced off of that today, and for the last two days,” he said. “We had the somewhat benign PCE report yesterday, which provided some initial support, showing that inflation came in roughly in line with expectations, a little bit on the lighter side. And the dollar index is also pulling back a little bit today, so that's providing some relief to precious metals as well.”
“But I'm seeing gold bouncing off that support, which is a good preliminary sign,” he added. “I would like to see a solid close today over $4,100. If we can get a solid close over [that level], that would definitely help sentiment.”
Columbo said he’s actually nibbling on some long positions in gold futures.
“Gold is heavily oversold right now,” he said. “I think it's way overdone. It's not fair for gold and precious metals to get whacked this hard. I think it's unjustified, especially because I believe we're still in a secular bull market.”
“I believe there's going to be a nice rebound very soon.”
Columbo said the market has been overcompensating for the Fed’s supposed hawkishness for months now, and some of that will need to be given back.
“All the way back in late January, precious metals got hammered when Kevin Warsh was nominated,” he said. “And then it happened again last Wednesday after the Fed meeting. I think it's mostly priced in, and I think the market is overreacting to the hawkishness, just being overly cautious.”
Meanwhile, he noted that from a technical perspective, the ten-year Treasury note just broke out above a triangle pattern. “That means Treasury prices are going up, rates are going down,” he said. “The ten-year note, it's actually breaking out to the upside. You can see that they've been pricing in this hawkishness really since January, and now it's almost like a sell-the-news, or a buy-the-news, type event.”
“A lot of it depends on oil prices, of course,” he warned. “There's this element of uncertainty with geopolitics. But right now, my outlook is to be bullish on Treasury bonds and bearish on rates at the moment. That's my current outlook, and that should be supportive for precious metals.”
Looking ahead, Columbo said he sees the strength in gold and silver continuing next week.
“I like the fact that sentiment is so bad and it's so oversold, and yet now it's rebounding from those lows,” he said. “I'm interested in this trade, I like the direction it's going. Assuming we get a solid close over $4,100 in the futures, I see the momentum being to the upside, at least in the short term. And, assuming gold continues on from there, the next area I'm watching is roughly $4,100 to $4,600. That's overhead resistance now. I just want to see it prove itself through strength.
“Whenever you have something so oversold like this, there is that potential for a violent move to the upside, especially because we are not in a secular bear market in precious metals,” Colombo said. “We are still in a secular bull market. That's the reason why I view this correction over the past five months as being more of a mid-cycle correction rather than a true bear market or downturn.”
This week, 18 analysts participated in the Kitco News Gold Survey, with a plurality of Wall Street respondents remaining bearish as gold posted its fourth straight weekly decline. Five experts, or 28%, expected to see gold prices gain ground during the week ahead, while eight others, or 44% of the total, predicted a price decline. The remaining five analysts, representing 28%, saw the yellow metal trending sideways next week.
Meanwhile, 238 votes were cast in Kitco’s online poll, with Main Street investors renouncing their bullish bias in the face of rate hike fears. 89 retail traders, or 37%, looked for gold prices to rise next week, while 109, or 46%, predicted the yellow metal would lose ground. The remaining 40 investors, representing 17% of the total, expected to see consolidation during the coming week.
The focus of next week’s economic calendar will be employment, with JOLTS, ADP, ISM Manufacturing, and jobless claims all shedding light on the state of the American labor force before June’s Nonfarm Payrolls report is released on Thursday ahead of the Independence Day holiday.
On Tuesday, markets will watch for U.S. Consumer Confidence, followed by JOLTS job openings for May. Then, Wednesday will see the release of ADP employment and ISM Manufacturing PMI for June, while Fed Chair Kevin Warsh will speak at an ECB event.
All eyes will then turn to U.S. Nonfarm Payrolls on Thursday morning, with U.S. markets closed on Friday ahead of Independence Day.
“Gold’s dip below $4000 looked to have enticed some bargain hunters,” said Marc Chandler, managing director at Bannockburn Global Forex. “However, the once-more-precious metal has not settled above its five-day moving average since June 16. It is found near $4078 now.”
Chandler said the pullback in Treasury yields may offer some background support, and central banks are still reporting gold purchases, “but note that China has taken action that squeezes out participants in the ‘paper gold market.’”
“The liquidation of tech stocks may be an under-appreciated drag,” he added. “The correlation between changes in the Nasdaq and gold is near 0.72 over the past 30 days, the highest in nearly two decades.”
Sean Lusk, co-director of commercial hedging at Walsh Trading, was happy to see gold and silver posting gains on Friday, but he thinks both metals have further to fall before they make any real headway.
“We traded at nearly 10% down this week before we bounced,” he said. “Now you’re getting some bargain buying coming in. Can we decline more? Of course, we can. But you’re coming into some bullish seasonals in the second half of July.”
“Gold and silver can decline a little more, but it's going to create a big buying opportunity.”
Lusk said he sees the months-long inverse correlation between gold and energy is coming to an end, and the metals will benefit, but not just yet.
“We've been trading so inverse to what's going on in the energy space, but I think that decoupling is going to come,” he said. “I don't think we're going to be on this stringent rate hike environment, especially with energy prices coming down. And once that gets baked into the supply chains – which will be a while – that will ease inflation.”
“The path of least resistance is higher for the dollar for a little bit, so that's going to keep a lid on some speculative buying in the metals,” he said. “But longer term, you’ve got other uses for those things. I would not be surprised to see silver get further down to $50. $50 was a big resistance level over time.”
“If we do get positive data in the next couple of weeks, we're going to hit a point where you're not going to want to go down further than $3,700, $3,800,” Lusk said. “That's where I think gold can go, and I think silver can get down to the low fifties. But then I'm going to become a buyer.”
“So near-term bearish, long-term bullish.”
Alex Kuptsikevich, senior market analyst at FxPro, expects gold prices to decline once again next week.
“Gold is rebounding at the end of the week after a correction in the odds of two key Fed rate hikes this year,” he said. “Nevertheless, the price is falling for the fourth consecutive week. Since the second half of the week, bears have been relentlessly trying to push the price below the psychologically significant $4,000 mark, but eased their grip in the afternoon on Friday.”
“At the same time, the long-term moving averages favour sellers, as a ‘death cross’ is looming (when the 50-day moving average falls below the 200-day moving average), reinforced by the fact that the price is trading below this cross,” Kuptsikevich warned. “On the weekly charts, attempts to push the price back above the 50-week moving average have failed. However, this is also the price support zone from the end of last year, so we can expect a fairly fierce battle around current levels.”
“It is also worth noting how the narrative for gold’s price movements has changed. Previously, the escalation between the US and Iran triggered downward price movements, with a clear inverse correlation between oil and gold,” he added. “But it has now become apparent that both assets can move in the same direction – downwards.”
Analysts at CPM Group issued a Sell recommendation on June 24, with an Initial Target Price of $3,800 and a Stop Loss at $4,125.
“On 11 June CPM recommended ultra-short-term investors stand aside amid volatile precious metals markets,” they wrote. “Gold was $4,234.90 at the time. We suggested gold could trade between $3,800 and $4,650 over the next two weeks. Gold traded as high as $4,403 in the following week. Then it began falling.”
CPM said they expect the downward move in gold prices “will continue in the weeks ahead, with the $3,800 technical target that so many market commentaries mention as the potential likely base in the near term.”
“Simply put, prices are declining because investors are selling,” the analysts wrote. “Some are trend following. Others see the economic and political environment as offering a respite from several seasons of unrelenting bad news. Non-traditional precious metals investors who had bought into the market from September into early 2026 continue to sell.”
CPM offered a number of reasons why the selling is occurring. “Stock markets are doing well. Bond markets are shaky. Oil prices are falling as oil begins to flow in greater volume through the Strait of Hormuz. Warsh’s comments last week suggest higher interest rates. Economic data has been stronger than had been expected,” the analysts wrote. “There may be an increased potential for an extended ceasefire and end of military action in the US-Iran war, although any extension of the ceasefire should be expected to be tenuous and at risk of sabotage by continued Israeli shelling and missiles into Lebanon, and U.S. and Iranian intransigence in their positions. Ukraine, meanwhile, is gaining an upper hand in its Russian invasion, with increased concerns about a potential change of leadership in Russia. Greater Republican, public, and lower Federal court opposition to many Trump efforts also is easing investor concerns.”
“In other words, there is a less hostile short-term economic and political outlook for the very near term, even if the longer-term outlook remains high risk,” they concluded. “This all said, the markets could still be surprised by headlines and news that could push gold prices sharply higher once more, reversing the very short-term trend.”
Michael Moor, founder of Moor Analytics, expects to see gold prices climbing in the coming days.
“HIGHER unless we take out the lower timeframe formation mentioned below,” he wrote. “In a Higher time frame, I cautioned on 8/16/18 the break above $1,183.0 warned of renewed strength. We have seen $4,443.1. This is ON HOLD. We held exhaustion with a 56268 high and rolled over $1,651.1. This is ON HOLD. On a medium timeframe basis: The trade below 52554 projected this down $740 (+)—we attained $1,279.7. The trade below 52036 brought in $1,227.9 of pressure. The trade below 51606 brought in $1,184.9 of pressure. These are ON HOLD.”
“On a lower timeframe basis: We held exhaustion with a 49177 high and rolled over $942.0,” Moor said. “The break below 48185 projected this down $185 (+)—we attained $842.8. The trade below 47923 projected this down $205 (+)—we attained $816.6. The break below 47420 brought in $766.3 of pressure. On 5/15 we left a medium bearish reversal—we have come off $577.5 from 45532. We held exhaustion with a 44036 high and rolled over $427.9. On 6/18 we left a minor bearish reversal—we have come off $303.6 from the 42793 open. These are ON HOLD.”
“I NOTED: we are likely in the last stretch of the move down from the 56268 high, with areas of possible macro exhaustion at 39741-38650, 35947-3909, and lower—we are holding the upper of these with a 39757 low and rallied $94.0,” he concluded. “The trade above 40148 (-23 per/hour) also warns of strength; but if we fail back below decently, look for decent pressure.”
At the time of writing, spot gold last traded at $4,088.38 per ounce for a loss of 1.65% on the week but a gain of 1.53% on the day.
