Gold prices have just experienced another week of strong fluctuations as investors continuously adjusted expectations about the monetary policy roadmap of the US Federal Reserve (Fed). After falling to the 4-380 USD/ounce zone in the last week of May, the precious metal has recovered significantly thanks to US inflation data not creating more pressure on the market.
The April Personal Consumption Price Index (PCE) report released on May 30 showed inflation to increase by 3.8%, in line with analysts' forecasts. This information helped improve investor sentiment, pulling gold futures for August delivery up about 71.5 USD in just one session, marking one of the strongest recovery sessions since the market entered a correction phase earlier this year.
By the beginning of June, gold prices fluctuated around 4,530-4,550 USD/ounce, significantly lower than the historic peak of 5,598 USD/ounce set in January. However, based on the year, gold still increased by about 40% compared to the same period last year, showing that the long-term upward trend has not been broken.
The biggest pressure on gold in recent times comes from the prolonged high interest rate environment. The US Federal Reserve (Fed) continues to maintain a cautious stance in the face of persistent inflation risks, while US Treasury bond yields and the USD remain high. This increases the opportunity cost of holding gold, an asset that does not generate yields.
Technically, gold is maintaining an important support zone of 4,370-4,400 USD/ounce. If this area is maintained, the price may recover to the 4,520-4,660 USD/ounce zone in the short term. Conversely, if the support level is broken, the market may face a deeper correction to the 4,100 USD/ounce zone.
However, the foundational factors supporting gold are still maintained. According to the World Gold Council (WGC), total global gold demand in Q1/2026 reached 1,231 tons, the highest level ever recorded for the first quarter of the year. Central banks net bought 244 tons of gold in the quarter, up 3% compared to the same period last year.
Notably, the demand for gold bars and gold coins continues to increase sharply, reflecting the trend of private investors seeking defensive assets in the context of a still volatile global economy. This is considered one of the important drivers helping the gold market maintain its attractiveness despite pressure from high interest rates.
In the coming time, the focus of market attention will be US economic data, especially the labor market and inflation. Signals showing that the US economy is cooling down or the Fed is getting closer to a cycle of monetary policy easing may create momentum for gold to regain its upward momentum in the second half of the year.
