Gold fell below its March low on rising expectations of Fed rate hike

Gold is currently trading in the $4,300–$4,315 per ounce range. Last week saw a 5% drop to the March low. Strong US labor market data was the key driver behind this decline. In May, the number of new jobs in the country surged by 172,000 instead of the expected 85,000. The report confirmed the resilience of the American economy and raised the odds of rate hikes by the Federal Reserve (Fed), promising nothing good to the precious metal.

Monetary policy remains the key factor for gold. The labor market data pushed US Treasury yields and the American dollar higher, stealing the spotlight from bullion, which does not generate interest income. That’s why traders will be closely watching the next Fed meeting on June 16–17. However, there is another reason as well: the new Chairman. Anyway, the central bank’s hawkish rhetoric is likely to put additional pressure on gold and send it lower.

Meanwhile, physical demand for the precious metal is not strong enough. Purchasing activity in India typically declines during this time of year, and gold-backed exchange-traded funds (ETFs) continue to see capital outflows.

However, the People’s Bank of China (PBOC) remains the bullion's pillar of support, having boosted its reserves for nineteen consecutive months. Unfortunately, these purchases cannot fully offset the pressure coming from financial markets.

The technical setup aligns with this bearish outlook. Gold hit a new local low near $4,300 after breaching the 200-day moving average. The Chaikin Oscillator remains negative, signaling that capital continues to flee bullion. The support zone lies between $4,300 and $4,315. If broken, the path toward a further decline to $4,200 would open up.

Consider the trading strategy presented below:

Sell gold during a rebound within the $4,300–$4,350 range. Place Take Profit at $4,200. Set Stop Loss at $4,450.

This forecast is valid from June 8 till June 15, 2026.