I. Gold Breaks Below $4000 Intraday, Bearish Momentum Releases Sharply
On Monday (June 29), spot gold closed down 1.58% at $4015.99 per ounce. Bearish pressure resurfaced in Tuesday morning trading.
On Tuesday (June 30), gold's intraday drop reached 1.32%, plunging over 53totradearound
53to trade around 3962.80 per ounce. During the session, gold broke multiple key moving average supports, hitting a low of $3942.57 per ounce.
II. Middle East Peace Situation Faces New Variables
Geopolitically, Iran launched missiles and drones at US facilities in Bahrain and Kuwait over the weekend, responding to President Trump's prior tough warnings. Trump then publicly announced that technical teams from both sides were heading to Doha, Qatar, for talks—but Iran's Foreign Ministry quickly denied it, stating no formal meetings with the US are planned in the coming days.
The conflicting statements on Doha talks highlight the high fragility of the temporary ceasefire reached on June 17. Despite Iranian President Pezeshkian's earlier claim that $6 billion in frozen assets would soon be unfrozen as a major victory, the lack of mutual trust has cast a shadow over the recently eased Middle East tensions.
III. USD Index and US Treasuries at High Levels, September Rate Hike Expectations Surge
The USD index, after touching highs, saw minor adjustments but remains steady near 101.11, hovering at 13-month peaks and poised for its largest monthly gain in nearly a year. Meanwhile, the US 10-year Treasury yield edged up to about 4.378%, with the 2-year yield rising 2.5 basis points to 4.113%.
CME FedWatch shows traders now pricing a 63% chance of a 25bp Fed rate hike in September. Elevated rates continue to pressure non-yielding gold.
IV. Market Focus on This Week's Key Employment Data
Beyond geopolitical uncertainty and rate hike pressures, upcoming US labor data is suffocating bulls. ADP employment report releases Wednesday, followed by June non-farm payrolls Thursday. Consensus expects 110,000 jobs added, with unemployment steady at 4.3%.
Zaner Metals senior metals strategist Peter Grant noted that markets are digesting stalled Middle East talks alongside Fed Chair Waugh's hawkish stance. If this week's jobs data remains strong, it could solidify expectations for prolonged high rates, risking further gold downside probing.
V. Outlook
Short-term, whether Doha talks truly collapse and the strength of this week's jobs data will determine if gold stabilizes near $3900. Amid elevated risk premiums and policy repricing, investors should stay highly cautious, managing positions flexibly for potential larger swings.
This is general information only and not financial advice. For personal guidance, please talk to a licensed professional.