Gold prices remain under pressure in the near term as rate hike fears fuel a stronger dollar, according to Praveen Singh, Head of Currencies and Commodities at Mirae Asset ShareKhan. On June 29, spot gold traded with a negative bias, changing hands at $4024, down 1.5% for the day, as inflation concerns and a US-Iran skirmish over the weekend sent oil and yields higher.
Price Action and Key Levels
On June 26, gold closed at $4089, up 1.53% after a slightly weaker US dollar on softer-than-expected May US PCE Price Index data released June 25. However, the metal posted a 1.4% decline for the week, its fourth straight weekly loss. The Dollar Index hovered around 101.13, down 0.2% on June 29. Two-year US yields at 4.11% were up 2 bps, while 10-year yields at 4.38% were largely steady.
| Date | Spot Gold Price | Daily Change | Weekly Change |
|---|---|---|---|
| June 26 | $4089 | +1.53% | -1.4% |
| June 29 | $4024 | -1.5% | — |
Geopolitical and Oil Market Drivers
Following a re-escalation of US-Iran conflict over the weekend, the two countries halted attacks and agreed to meet in Qatar on Tuesday to discuss the memorandum of understanding signed this month, though Iran says nothing is planned. White House press secretary Karoline Leavitt warned that violence will be met with violence. Iran claimed a right to full control of the Strait of Hormuz and insisted vessels use a specific route, while Oman and the International Maritime Organization try to establish a new route bypassing Iranian waters.
Brent oil futures fell for the third straight week in the week ending June 26, posting a weekly loss of around 10% to close at $72.60. However, oil prices gained 2% on Monday (June 29) on supply concerns owing to the uneasy cease-fire in the Persian Gulf.
Gold ETF Holdings and CFTC Positioning
Total known global gold ETF holdings fell to 96.72 MOz on June 26, the lowest since September 29, 2025. Holdings declined nearly 0.40 MOz on June 26, the biggest outflow since April 17, which recorded a net outflow of 0.71 MOz. ETF holdings have fallen 2.92 MOz year-to-date (70 tons) and are down 4.20 MOz (131 tons) since the Iran war broke out on February 28.
In contrast, money managers increased their bullish gold bets by 92 net-long positions to 113,010 in the week ending June 23, according to weekly CFTC data on futures and options. This net-long position was the most bullish in 21 weeks.
Economic Data and Dollar Strength
US economic data released recently showed mixed signals. The University of Michigan Consumer Sentiment (June) was revised higher from 48.90 to 49.50, but lagged the estimate of 50. Inflation expectations for both one-year and five-to-ten year were lower than expected. US inflation-adjusted consumer spending rose 0.3% in June (estimate 0.2%) after stalling in April. The PCE price index rose 4.1% year-over-year (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%). Markets were cheered by the PCE Price Index rising 0.4% month-over-month, which came lower than the estimate of 0.5%. US GDP grew at a 2.1% annualized rate in Q1 versus the initial estimate of 1.6%.
The Japanese yen tumbled to the lowest since 1986 against the US dollar as JGB yields remain negative despite recent Bank of Japan rate hikes.
Near-Term Outlook
According to Praveen Singh, head currencies and commodities at Mirae Asset ShareKhan, gold prices are expected to continue being under pressure in the near-term as rate hike fears feed into a stronger dollar. The combination of a stronger dollar, rising yields, and ETF outflows suggests limited upside. Key data to watch include upcoming US employment and inflation figures, along with developments in US-Iran negotiations and oil market stability.
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