58 minutes ago
4
ARTICLE AD BOX
Elevated and surging oil prices continue to weigh on precious metals. (AI image)
Gold price prediction today: Gold prices continue to be weighed down by inflation concerns amid geopolitical tensions and rising oil prices, says Praveen Singh, Head Currencies and Commodities, Mirae Asset ShareKhan.Gold Price Performance:
- On June 1, spot gold traded between $4447 and $4546 with a bearish tilt as weak-looking crude oil prices surged yet again on escalating tensions between US and Iran, which stoked rate hike concerns.
- At the time of writing, spot gold was trading with a daily loss of 1.32% at $4480.
- Earlier, in the week ending May 29, spot gold traded in the range of $4366 (May 28) and $4596 (May 29). It slumped to a two-month low of $4366 as the US struck Iran's targets for the second time in the week before the metal recovered quickly to close higher on the week on the news that US and Iran have reached a preliminary deal/Memorandum of Understanding to extend ceasefire by 60 days. On May 29, the shiny metal closed with a gain of 1% at $4540; it was up 0.68% for the week.
Geopolitics and oil:
- Simmering tensions between US and Iran erupted once again on June 1 as the US military said it carried out more strikes in Southern Iran over the weekend and intercepted an Iranian missile aimed at American forces in Kuwait. Iran's IRGC claimed that it targeted a US military base from which attacks originated. Meanwhile, Israel expanded its war in Lebanon, a major thorny issue in US-Iran negotiations. The situation worsened on Monday when Iran's semi-official Tasnim news agency reported that Iran would halt talks with the US in protest over Israel’s expanded ground assault in Lebanon. It is to be noted that control of the Strait of Hormuz, release of frozen funds of Iran (initially $12 billion out of total funds of $24 billion), disposal of Iran's enriched uranium and Israel-Lebanon war are the crucial sticking issues in the negotiations between the US and Iran.
- Brent crude oil front-month futures, which fell 20% in the week ending May 29 – marking the worst monthly fall since 202-- jumped over 6% on Monday due to escalating regional tensions.
- On June 1, China stepped up its action in response to its rivalry with the US in technology as the former strengthened oversight of outbound investment through a new directive to improve reviews for overseas investments that could affect national security. New regulations, published Monday by China's Cabinet and effective July 1, prohibit investors from transferring restricted goods, technology, services and data overseas without prior authorization and introduce financial penalties for offenders.
Gold ETF and COMEX gold inventory:
- Total known global gold ETF holdings fell for the second straight week in the week ending May 29 and stood at 98.43 MOz, down 0.52 MOz YTD (16.17 tons). Gold ETF holdings are currently down 2.49 MOz (77.43 tons) since the Iran war began on February 28.
- As of May 29, registered COMEX gold inventory stood at 15.51 MOz, lowest since February 4, 2025. The registered inventory is down 36% from the record peak of 24.25 MOz seen in April 2025.
CFTC positioning:
- As per the weekly CFTC data of COMEX gold futures and options for the week ending May 26, money managers increased their bullish gold bets by 2,543 net-long positions to 96,931 as long-only positions rose 476 lots to 124,534, while short-only positions fell 2,067 lots to 27,603 lots -- lowest in eight weeks.
Data roundup:
- US ISM manufacturing data released on June 1 showed that manufacturing activity expanded in May at the fastest pace in four years as new orders and production picked up. ISM manufacturing Index rose to 54 in May (estimate 53, prior 52.7) as nearly every manufacturing industry reported growth. ISM prices remained elevated at 82.1 (prior 84.60, estimate 85) as the new orders Index expanded more than forecast (56.80 Vs the forecast of 54.50), though ISM employment Index contracted for the thirty-second month in a row.
- China's manufacturing stagnated in May (50 Vs the forecast of 50), though composite PMI at 50.10 beat the forecast of 49.50 as non-manufacturing PMI unexpectedly expanded (50.10 Vs the estimate of 49.50). RatingDog manufacturing PMI at 51.80 topped the forecast of 51.30 as the Index showed expansion for the sixth straight month.
- S&P Global Eurozone manufacturing PMI came in at 51.60 (initial estimate 51.40) in its final reading for May month.
- UK's manufacturing at 53.90 in its May final reading beat the forecast of 53.70.
US Dollar Index and yields:
- US Dollar Index edged higher on June 1 as US yields hardened. At the time of writing, the Dollar Index was hovering around 99.23, up 0.30% for the day.
- Two-year US yields had surged 2% to 4.08%, while 10-year yields, up 1.5%, were knocking at the crucial psychological resistance of 4.50%.
Fed rate hike probability:
- Implied overnight rates currently suggest 0.85 rate hikes by the year-end as compared to 0.57 rate hikes seen on May 29.
Upcoming data:
- This week is crucial as major US data on tap include JOLTs job openings (June 2), May ADP employment change (June 3), ISM services Index (June 3) and May nonfarm payroll report (June 5). It is to be noted that non-farm payroll reports for March and April have been somewhat encouraging, which has alleviated job market concerns to an extent.
- Investors will also monitor Eurozone CPI (June 2) and Eurozone's services and composite PMIs (June 3).
- Major Asian data in focus include China’s RatingDog services and Composite PMIs (June 3).
Gold Price Outlook:
- Elevated and surging oil prices continue to weigh on precious metals as inflation concerns keep the possibility of a rate hike by the year-end alive.
- Anaemic ETF flows and huge volatility in gold prices deter investors as the Middle East situation remains highly uncertain. Strong equities performance has also dented the safe appeal of gold.
- The yellow metal is expected to remain under pressure unless the US and Iran agree to extend the ceasefire formally.
- A breach of the stiff support in the $4400-$4406 zone will open the way to $4350. Major support is at $4099 zone (March 23 low). Resistance is seen at $4600/$4670.
- The US and Iran formally agreeing to extend their ceasefire deal will lead to a sharp bounce in the metal; hence, risks and positions should be monitored accordingly.
(Disclaimer: Recommendations and views on the stock market, other asset classes or personal finance management tips given by experts are their own. These opinions do not represent the views of The Times of India.)
English (US) ·