Gold price prediction: Why prices are unlikely to rise much in near-term; check outlook

Gold is trading with a negative bias on inflation concerns as US-Iran skirmish in the weekend sent oil and yields higher. (AI image) Gold price prediction today:Gold prices are expected to continue being under pressure in the near-term as rate hike fears feed into a stronger dollar, says Praveen Singh, Head Currencies and Commodities, Mirae Asset ShareKhan.Gold Performance: On June 29, gold traded with a negative bias on inflation concerns as US-Iran skirmish in the weekend sent oil and yields higher. Spot gold, at the time of writing this article on Monday night, was changing hands at $4024, down 1.5% for the day. On June 26, driven by a slightly weaker US Dollar on slightly softer than expected May US PCE Price Index (m-o-m) data released on June 25, the metal closed with a gain of 1.53% at $4089; however, it was down 1.4% for the week – its fourth straight weekly loss. Geopolitics and oil: Following re-escalation of US-Iran conflict in the weekend, US and Iran have halted attacks and would meet in Qatar Tuesday to discuss the memorandum of understanding signed this month, though Iran says that nothing is planned. White House press secretary Karoline Leavitt warned that violence will be met with violence. Meanwhile, Iran claimed a right to full control of the Strait of Hormuz and insisted vessels to use a specific route as Oman and the International Maritime Organization try to establish a new route that bypasses Iranian waters. Iran sees this alternative route as directly contradicting the fifth article of what Washington signed onto in its memorandum of understanding with Tehran, which led to a cease-fire. Although the article being somewhat vague does not state it clearly, Iran interprets it charging Iran with ensuring safe passage through the strait. It also says that Iran is to conduct dialogue with Oman to define the future administration and maritime services in the Strait of Hormuz. In the week ending June 26, Brent oil futures fell for the third straight week as the counter posted a weekly loss of around 10% to close at $72.60. Oil prices gained 2% Monday on supply concerns owing to an uneasy cease-fire in the Persian Gulf. Data roundup: US’s University of Michigan Consumer Sentiment (June) data released on Friday showed an improvement as it was revised higher from 48.90 to 49.50 but lagged the estimate of 50. Sentiment remains depressed around historical lows. Inflation expectations for both one-year and five-ten year were lower than expected though. US’s Inflation-adjusted consumer spending rose 0.3% in June (estimate 0.2%) after stalling in April. The PCE price index rose 4.1% y-o-y (forecast 4.1%, prior 3.8%), the most since April 2023. Core prices were up 3.4% y-o-y (Forecast 3.4%, prior 3.3%), while prices were up 0.3% m-o-m (estimate 0.3%, prior 0.3%). Markets, cheered PCE Price Index rising 0.4% m-o-m as it came lower than the estimate of 0.5%. US GDP grew at 2.1% annualized rate in Q1 Vs the initial estimate of 1.6%. Dollar Index and yields: At the time of writing, the Dollar Index was hovering around 101.13, down 0.2% for the day. The Japanese Yen tumbled to the lowest since 1986 against the US Dollar as the JGB yields remain negative despite the Bank of Japan hiking rates recently. Two-year US yields at 4.11% were up 2 bps, while 10-year yields at 4.38%% were largely steady. Gold ETF holdings: Total known global gold ETF holdings fell to 96.72 MOz on June 26, which is the lowest since September 29, 2025. Holdings fell nearly 0.40 MOz on June 26, which marks the biggest outflow since April 17 that recorded a net outflow of 0.71 MOz. ETF holdings have declined 2.92 MOz YTD (70 tons) and are down 4.20 MOz (131 tons) since the Iran war broke out on February 28. CFTC positioning: Money managers increased their bullish gold bets by 92 net-long positions to 113,010 in the week ending June 23, weekly CFTC data on futures and options show. The net-long position was the most bullish in 21 weeks as long-only positions rose 2,135 lots to 130,663. The long-only total was the highest in 14 weeks, while short-only positions rose 2,043 lots to 17,653 lots. Central Bank watch: Federal Reserve Bank of Richmond President Tom Barkin, in an interview with Bloomberg on Sunday, said that that inflation is too high, though, he sees tentative signs that inflationary pressure may moderate soon as gasoline prices have declined. Federal Reserve Bank of Minneapolis President Neel Kashkari said on June 26 that signs of widespread inflation led him to pencil in one interest-rate increase for this year in the central bank’s economic projections released on June 17. He added that he does not trust Iran on honouring the agreement. PBoC, China’s central bank, on June 29, conducted 300 billion yuan ($44 billion) of overnight reverse repurchase agreements in open market operations. The Bank set the interest rate on its new overnight liquidity tool at 1.25% Vs the estimate of 1.35%. Some economists see it as a harbinger of rate cut in the second half, though some view it as a tool to ease seasonal funding stress. Markets see the Federal Reserve hiking rates in October this year; however, the probability of another rate hike by March 2027 has come down from 100% to 50%. Upcoming data: Key US data on tap this week include May JOLTs job openings (June 30), ISM manufacturing (July 1) and June non-farm payroll (July 2). Eurozone's June (Preliminary) CPI data and manufacturing PMI will be released on July 1, while services and composite will be out on July 3. UK’s 1Q final GDP will be released on June 30. Manufacturing PMI will be released on July 1, whereas services and composite PMIs will be out on July 3. China’s NBS manufacturing and services PMIs will be released on June 30, while RatingDog manufacturing and services data will be out on July 1 and 3, respectively. Upcoming event: The European Central Bank Forum will be held in Sintra, Portugal from June 29 to July 1. The official theme of this year's forum is "Shaping Europe's future: innovation, growth and stability". The Fed Chair Warsh will participate in a panel discussion with other eminent central bankers at 6:30 PM on Wednesday. Gold Price Outlook: Continuous ETF outflows, rate hike worries as gold does not yield interest and uncertainty over the Iran deal will keep gold restrained in the short term. This week is crucial for the metal as US nonfarm payroll report will be released. We have seen three successive decent job reports (March through May), which alleviate worries over the job market, so the Federal Reserve can afford to step up its fight against inflationary pressure by hiking the rate at least once this year. Minor miss on PCE m-o-m data is hardly a reason to celebrate as 0.4% m-o-m inflation reading amounts to close to 5% y-o-y inflation reading. Upside is expected to be limited. Gold can decline to $3750 in very short term, though medium-to-long term outlook remains constructive. Support is at $3960. Resistance is at $4100/$4170/$4250. For gold to reverse its present course on a sustainable basis, we need to see rate hikes being priced out/flaring of geopolitical tensions in a manner that does not push oil prices higher (example US-China)/fiscal worries taking over inflation worries/sharp decline in US Dollar, etc. (Disclaimer: Recommendations and views on the stock market, or any other asset classes or personal finance management tips given by experts and analysts are their own. These opinions do not represent the views of The Times of India.) The TOI Business Desk is a vigilant and dedicated team of journalists committed to delivering the latest and most relevant business news from around the world to readers of The Times of India. The primary focus of the TOI Business Desk is to keep a watchful eye on the global business landscape, covering a wide spectrum of industries, markets, economic trends, in-depth analysis, exclusive reports and breaking stories that impact businesses and economies. 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