Overseas precious metals experienced significant declines overnight. Spot gold fell nearly 3% in a single day, breaching the $4,000 per ounce level, while spot silver dropped over 8% intraday, both hitting fresh thirteen-month lows. In the near term, pressured by three major bearish drivers, the gold price is continuing its path lower, maintaining a bearish structure.
Fundamental Analysis
The three primary drivers influencing gold price fluctuations today are as follows. First, the Federal Reserve's hawkish stance has been fully repriced by the market. Among the 19 members of the June Fed dot plot, nine supported at least one interest rate hike within 2026, causing market bets for a September hike probability to surge to 70%, while expectations for rate cuts have essentially evaporated. The 10-year U.S. Treasury yield has stabilized above 4.50%, sharply increasing the opportunity cost of holding non-yielding gold.
Second, the U.S. dollar has surged to a 13-month high. With the dollar index climbing above 101.8, gold, priced in dollars, is directly "priced down," and physical buying demand from overseas has simultaneously contracted.
Third, the geopolitical risk premium has faded, coinciding with a rush for the exits by investors. The U.S. and Iran reached an understanding regarding the Strait of Hormuz, and the U.S. granted a 60-day sanctions waiver, leading to a pullback in oil prices. Consequently, the buying support that was previously propped up by geopolitical tensions has collectively withdrawn. Simultaneously, global gold ETFs have seen net outflows for five consecutive weeks, and concentrated long liquidation on COMEX has triggered programmed stop-losses, amplifying the selloff.
Overall Assessment
Overall, this round of selling represents a confluence of four bearish factors: monetary policy, currency exchange rates, geopolitics, and market liquidity. The risks of attempting to catch a falling knife remain significant. This week, focus will be on whether the PCE data can cool the "rate hike narrative" and whether central bank bargain-hunting emerges to provide support around the $3,950–$4,000 level. The former will determine the overall direction, while the latter may only offer a floor and is unlikely to reverse the prevailing bearish trend.
Technical Perspective
From a technical standpoint, the gold price continued its downward trajectory yesterday. On the weekly chart, the price remains within a bearish pattern, highlighting the current weak market structure. On the daily chart, multiple key moving averages are exerting downward pressure on the price. Furthermore, the current price is trading below this week's pivotal level of $4,220 per ounce. The alignment of bearish signals across multiple timeframes also indicates that the bears currently hold the advantage. The primary trading strategy remains selling on rallies, though blindly chasing the market lower is not advised, as a weak technical rebound for correction is possible in the short term.
Immediate support for gold is seen around $3,959 per ounce. A decisive break below this level would shift the support focus to around $3,796 per ounce. On the upside, initial resistance is observed near $4,057 per ounce. A convincing break above this level would shift the resistance focus to the pivotal zone around $4,220 per ounce.
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