Gold prices continue to face severe selling pressure, now trading below $4,100 per troy ounce and representing a 26% decline from its January peak of $5,600. According to ET Now, the precious metal has erased this year's gains of approximately 30% in January and is now down 5.5% year-to-date. The scale of the correction has already surpassed the roughly 22% decline seen during the U.S. Federal Reserve's aggressive tightening cycle in 2022, making it one of the most pronounced pullbacks in recent years. On June 11, gold traded between $4,024 and $4,119 after a sharp decline of 4.40% to $4,067 - the lowest since November 24. The latest data shows gold trading at $4,083, up 0.83% for the day, though it remains under significant pressure from multiple factors. As per Investing.com, gold fell over 3% (-$130 an ounce) on Friday, wiping out nearly all its early 2026 gains, with the S&P 500 now surpassing gold for 2026 so far.
Options traders in the SPDR Gold Shares (GLD) ETF have turned sharply bearish, with one popular contract now betting gold will fall another 40% by June 2028. According to reports from CNBC, of the $200 million in GLD options premium traded Wednesday, $130 million was tied to puts, with 8 of the 10 most active contracts being puts that were bought rather than sold. The second-most popular contract was the 240-strike put expiring in June 2028, priced at $11.50, which would turn a profit if GLD falls roughly 40% from current levels. As per ET Now, investor positioning has also shifted notably, with ETF investors booking profits after gold's record rally and speculative long positions seeing liquidation as interest rate expectations evolve.
The US Fed decision on June 17 is expected to be the next major directional cue for gold prices, with the meeting marking the first meeting of Kevin Warsh as Fed Chair. As per Business Standard, encouraging nonfarm payroll data, strong US ISM data, and inflation running well above the Fed's 2% target are likely to shift the FOMC's focus from job market to inflation concerns. Implied overnight rates price in a 25-bps hike by the Fed by year-end, while the probability of a rate hike in 2027 stands at around 0.60%. The ECB hiked rates by 25 bps to 2.25% on June 11 - its first hike in nearly 3 years - as ECB President Lagarde warned of the impact of a prolonged energy shock from the Iran war. According to ET Now, expectations of a potential Federal Reserve rate hike in December have risen sharply, further weighing on gold's appeal.
Gold has broken its 200-day moving average for the first time since 2023, though this does not signal a slide into the bear market according to Kotak Securities. Chainwala has placed immediate support for spot gold at $3,900, noting the metal may slide to $3,800 if correction extends. As per ET Now, the $4,098 level is widely seen as a crucial near-term support, with a decisive break below this threshold potentially triggering momentum-driven selling and pushing prices toward the $3,550-$3,600 range. On the upside, resistance is seen at $4,200/$4,300, with the metal potentially falling to these levels in the short run. Business Standard analysts suggest gold may fall to $3,800/$3,900 in the short run while resistance is at $4,200/$4,300. Domestically, Chainwala sees support for gold at ₹1,44,000 per 10 grams, with the next support level at ₹1,40,000.
The precious metals selloff has been attributed to official-sector selling, particularly from Turkey's central bank selling gold to buy dollars and support the lira, as well as Gulf nations including Qatar, UAE, and Saudi Arabia selling gold to fund war efforts. As noted by The Economic Times, experts believe that much of the current sell-off is turning in the technical trend, with the focus clearly shifting to the outlook for US growth and US monetary policy. According to ET Now, a firmer U.S. dollar has added to the downward pressure, with the Dollar Index recently reclaiming the key 100 mark for the first time in nearly two months, making gold more expensive for holders of other currencies and reducing the attractiveness of non-yielding assets. Physical demand trends have also softened in key markets, with elevated domestic prices combined with a 15% import duty dampening jewellery demand in India, prompting buyers to defer purchases. Despite the price volatility, experts see buying interest in gold, especially in lower levels, with the rupee weakness providing additional support to MCX Gold prices.
