Gold prices have just experienced another week of strong fluctuations as pressure from US inflation increases and expectations that interest rates will continue to remain high have pushed the precious metal down close to the important support level of 4,000 USD/ounce before a slight recovery at the end of the week.
At the beginning of the week, spot gold traded around 4,327.46 USD/ounce and at one point increased to 4,362.94 USD/ounce on June 10. However, the upward momentum quickly weakened as US economic data continuously sent out inflation signals that had not yet cooled down.
Selling pressure increased sharply in the midweek session after the US consumer price index (CPI) increased by 4.2% in May compared to the same period last year - the strongest increase since 2023. This development has increased concerns that the US Federal Reserve (Fed) will continue to maintain its tight monetary policy longer than expected.
Gold prices quickly broke through the 4,200 USD/ounce mark and plunged to a weekly low of 4,023.10 USD/ounce, the lowest since the end of 2025.
However, bottom-fishing buying pressure appeared when gold approached the psychological support zone of 4,000 USD/ounce. By the end of the week, spot gold prices recovered to around 4,210 USD/ounce but still recorded another week of decline.
Mr. Marc Chandler - Managing Director of Bannockburn Global Forex - said that the recovery at the end of the week helped gold regain about 38.2% of its decline since the nearly 4,600 USD/ounce peak at the end of May. However, momentum indicators have not yet shown clear reversal signals.
According to Kitco News' weekly gold survey results, Wall Street analysts are now significantly more cautious than last week. Most experts choose to stand by and observe ahead of the Fed's policy meeting.
Mr. Adrian Day - Chairman of Adrian Day Asset Management said that the possibility that gold has formed a short-term bottom is increasing. According to him, if inflationary pressure subsides and the Fed does not raise interest rates in the near future, gold may gradually regain its upward momentum.
Meanwhile, Mr. David Morrison - Senior Market Analyst at Trade Nation said that gold is still in technically risky territory. Despite the short-term recovery, the downward trend has not really ended.
From a more optimistic perspective, Mr. Rich Checkan – Chairman and CEO of Asset Strategies International said that gold holding firm in the $4,000/ounce range is a positive sign. According to him, if the Fed keeps interest rates unchanged in the upcoming meeting, gold prices have a chance to recover in the following weeks.
Mr. Daniel Pavilonis - Senior commodity broker at StoneX Group - said that many factors that supported gold in the strong upward period before have not changed, including high global debt, asset diversification needs and central bank buying activities.
Some experts also believe that gold is entering a accumulation phase after a three-year upward cycle. According to Alex Kuptsikevich - Senior Market Analyst at FxPro, gold adjusting to the 4,000 USD/ounce range may help the market complete the necessary correction process before forming a new upward cycle in the coming years.
Meanwhile, CPM Group experts recommend investors to be cautious in the short term as the market may still continue to fluctuate strongly. This organization forecasts that gold may fluctuate in a wide range from 3,800-4,650 USD/ounce in the period from now until the end of summer.
Next week, the focus of the market will be the Fed policy meeting and data on retail, housing and manufacturing in the US. New signals on inflation and interest rates are expected to determine the next direction of gold after many weeks of strong fluctuations.
