On Monday, June 29th, international gold prices retreated and closed lower. The decline was influenced by mutual military strikes between the US and Iran over the weekend, alongside Iran's statement that its current focus is on implementing a memorandum of understanding and it will not negotiate with the US in the near term. The renewed escalation in US-Iran tensions pushed oil prices higher, stoking inflation concerns and reinforcing market expectations for rising interest rates, which in turn weighed on gold prices. The metal ultimately gave back the gains made on the prior Friday and remains below its short-term moving averages, with bears maintaining the upper hand. However, on the weekly chart, the price is still positioned above the rising trendline, suggesting subsequent price action will likely be dominated by range-bound consolidation.
In terms of specific price movements, gold opened the week at $4,082.66 per ounce, briefly reaching an intraday high of $4,086.05 before trending lower in a generally oscillating pattern. This downtrend continued until around 10:00 PM EST, when the price touched an intraday low of $4,000.84. A subsequent rebound from this level lacked sustained momentum, leading to pressured consolidation, with the session finally closing at $4,016.50. The daily trading range was $85.21, resulting in a net loss of $66.16, or 1.62%.
Looking ahead to Tuesday, June 30th, international gold opened with modest strength, supported by some profit-taking from short positions and a weaker US dollar in early trading. However, intraday price action is expected to remain primarily volatile and range-bound.
Market participants will be monitoring several US economic data releases, including the April FHFA House Price Index month-over-month, the April S&P/Case-Shiller 20-City Composite Home Price Index year-over-year, the June Chicago PMI, May JOLTs Job Openings, and the June Conference Board Consumer Confidence Index. Overall market expectations for this data are bearish for gold. However, as key non-farm payrolls data is anticipated later in the week, any bearish pressure from today's figures is likely to be limited, and price action is expected to remain choppy.
From a fundamental perspective, the outlook for US-Iran negotiations in Doha remains uncertain, and the temporary ceasefire agreement appears fragile, contributing to a weaker price environment. On one hand, geopolitical risks should theoretically support safe-haven demand for gold. On the other hand, inflation concerns are strengthening market expectations for the Federal Reserve to raise interest rates, which suppresses the appeal of non-yielding assets like gold.
Currently, the market is simultaneously digesting the impact of Middle East tensions and the Fed's hawkish stance. Key employment data, including the non-farm payrolls report, is due this week. If the data comes in stronger than expected, it would further support the case for the Fed maintaining higher interest rates for longer, potentially pushing gold to new lows. Conversely, weaker data could help prices find a bottom and consolidate ahead of a potential recovery.
Technical Analysis Overview
On the monthly chart, gold continues to exhibit downward momentum, moving further away from the resistance posed by the 5- and 10-month moving averages and the rising trendline. Bearish pressure is intensifying, suggesting the potential for further downside adjustment, with targets near the midline support around $3,760 and possibly $3,500. This area could also serve as a potential entry point for renewed bullish momentum.
On the weekly chart, gold has been trading below its 5- and 10-week moving averages for several weeks, indicating a weak trend. The price has now broken below the support of the 60-week moving average and continues to trend lower, increasing bearish pressure. There is a short-term inclination to test support near the lower Bollinger Band around $3,920. On the upside, the key will be whether the price can reclaim a position above the 60-week moving average.
On the daily chart, gold is currently consolidating near lateral support and the support line of the rising trend channel established from the start of 2024. The price action remains under pressure. The focus is on the strength of this support level; a break below could open the path toward the next trendline support near $3,700. Any rebound from current levels would still need to contend with resistance from short-term moving averages.
Key Levels to Watch
For gold, initial support is seen around $3,975 or $3,920, while resistance is noted near $4,020 or $4,040.
For silver, initial support is observed around $56.60 or $56.10, with resistance located near $58.70 or $59.60.
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