Gold prices rose for the first time in four trading days during the European session on Monday, June 22, although they pared some of the day's earlier strong gains and were trading below the $4,200 per ounce level.
The announcement by mediators Qatar and Pakistan of a 60-day roadmap for a final US-Iran peace agreement weighed on oil prices, easing market concerns about inflation and rising interest rates, which provided some support for gold. However, the price remained not far from the more than one-week low hit last Friday.
Underlying Factors: Rate Hike Expectations and Geopolitical Risks Weigh
Despite the first gain in four days, expectations for further interest rate hikes from the US Federal Reserve continued to suppress upward momentum for gold. The federal funds futures market indicated traders were pricing in a nearly 90% probability of another rate hike by the Fed before the end of the year. This expectation was further reinforced after the Fed's hawkish projections last week, where policymakers clearly stated that policy rates would need to be raised further this year if inflation remains persistently high.
In a post-meeting press conference, the new Fed Chair emphasized the goal of "price stability," suggesting that the central bank would not rush to cut rates even if economic growth slows. This hawkish stance provided ongoing support for the US dollar, a key factor limiting gold's gains.
Meanwhile, weekend geopolitical developments provided another boost for the dollar. Iran accused the US and Israel of violating the ceasefire agreement and announced the re-closure of the Strait of Hormuz due to continued Israeli airstrikes in Lebanon. US President Trump subsequently threatened new military action against Iran if Hezbollah in Lebanon continued to attack Israel. This series of events highlighted the fragility of diplomatic progress, keeping a geopolitical risk premium in place and driving safe-haven flows into the US dollar, which weighed on gold.
Furthermore, the situation in Ukraine and Russia further boosted safe-haven demand for the dollar, helping the dollar index stem its retreat from the highs seen since May 2025 last Friday, thereby limiting gold's upside potential.
Geopolitical Landscape: Dual Conflicts Influence Safe-Haven Dynamics
The current global geopolitical situation, characterized by a "dual conflict" dynamic, presents a complex influence on gold's safe-haven appeal.
In the Middle East, the initiation of the 60-day US-Iran peace roadmap should have eased market anxiety. However, President Trump's military threats and Iran's announcement of closing the Strait of Hormuz cast a shadow over the ceasefire prospects. Concerns about escalating tensions in Lebanon and the security of the Strait continue to support demand for safe-haven assets, but funds are flowing more towards the US dollar than gold, as the dollar benefits from both rate hike expectations and safe-haven demand.
The situation in Ukraine and Russia adds another layer of global geopolitical uncertainty. The coexistence of these two major hotspots makes it difficult for global risk appetite to sustain recovery, suggesting the safe-haven narrative will remain relevant for the foreseeable future.
Institutional Perspectives
Goldman Sachs maintains its year-end 2026 gold price target at $5,400 per ounce. The firm had previously raised its target to this level at the beginning of the year and did not revise it down after a significant correction (over 10%) in gold prices in March, demonstrating firm confidence in a structural bull market.
Analysts believe central bank purchases remain a key support, with an estimated monthly purchase of about 60-70 tons in 2026 (significantly higher than pre-pandemic levels), contributing significantly to price appreciation. While ETF and private sector demand have softened in the short term due to high interest rates and a strong dollar, the risk is skewed to the upside, especially if geopolitical conflicts intensify or the economy slows. The current price range of $4,150-$4,200 is seen as a healthy consolidation phase, not the start of a bear market.
Goldman Sachs notes that while the gold price has retreated from its early 2026 highs, fundamentals such as supply tightness and multilateral demand support further gains. Short-term risks include a more hawkish Fed policy pushing real yields higher, but in the medium to long term, gold's role as a safe-haven and diversification asset will strengthen. The firm maintains an overall bullish tilt, recommending positioning during pullbacks, with the target price implying a potential gain of about 25-30% from current levels.
UBS Group has revised down some of its 2026 targets: the mid-year target has been lowered to approximately $5,200 per ounce, and the year-end target has been reduced from $5,900 to around $5,500, primarily due to a stronger US dollar, high real yields, and weak short-term investor demand.
Nevertheless, UBS still views gold as an attractive diversification asset, expecting demand to recover in the second half of the year, supported by central bank purchases and physical demand from Asia. While earlier, more aggressive forecasts have been revised, the long-term bullish logic remains unchanged: geopolitical risks, the potential for stagflation, and global reserve diversification will continue to benefit gold prices.
With spot gold currently around $4,150-$4,200, UBS views this as a market adjustment period of "rediscovering opportunity cost" but one that does not alter the bull market trend. Downside risks include the Fed maintaining high interest rates for longer, while potential upside catalysts include geopolitical escalation or weaker economic data. The firm advises investors to view gold as a long-term hedge and maintain a moderate allocation. The overall outlook is cautiously optimistic, emphasizing seizing structural opportunities amid volatility.
According to the daily chart, spot gold has been in a sustained retreat from its recent high of $5,596.33. The current price is trading around $4,200, with the previous low of $4,023.85 forming a short-term support level. The short-term MA20 and MA50 moving averages are both positioned above the current price, forming strong resistance, with the price consistently trading below these short-term averages. Only the longer-term MA200 moving average remains upward-sloping, suggesting the long-term uptrend is not completely reversed, but short-term correction pressure is evident.
Technical indicators show clear bearish signals. The MACD indicator's DIFF line remains below the DEA line, with the histogram staying in bearish territory, indicating downward momentum has not fully dissipated. The RSI reading is 38.42, below the 50 midline and not yet in oversold territory, suggesting room for further declines.
Key support on the chart is the previous low of $4,023.85. A break below this level would open up further downside space. The first resistance level above is the MA20 at $4,337.44, followed by the MA50 at $4,529.26. The current confluence of moving average resistance and bearish indicators maintains an overall weak and downward-leaning pattern. Even if short-term rebound corrections occur, they are likely to face selling pressure near the short-term moving averages. The recommended trading approach is primarily bearish, with a focus on tracking the effectiveness of the key $4,023.85 support level.
As of 16:12 Beijing time on June 22, spot gold was trading at $4,190.27 per ounce.
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