In the week ending June 12, the international spot gold price opened at $4,329.03 per ounce, reached a high of $4,363.66, dipped to a low of $4,024, and ultimately closed at $4,217.05. This represented a weekly decline of $110.72, or 2.56%, marking the second consecutive week of losses.

The price action was driven by a volatile mix of shifting Middle East geopolitics, persistent inflationary pressures, and a market reassessment of the Federal Reserve's policy trajectory. These factors briefly pushed gold into a technical bear market. However, the price managed to find a floor above the crucial $4,000 support level as long-term investors stepped in, halting a period of intense selling pressure. A subsequent two-day rebound later in the week suggested the precious metal may be attempting to form a short-term base.

Looking Ahead: All Eyes on the Fed

The focus for the new week shifts decisively to the first Federal Open Market Committee (FOMC) meeting under the new Chair. Market consensus firmly expects the central bank to hold interest rates steady. The key variable for gold will be the policy tone set by the new leadership. Should the Chair emphasize inflation risks and signal room for further policy tightening, gold could face renewed pressure to test the $4,000 support. Conversely, a more dovish or measured policy stance could provide the catalyst for a further rebound in prices.

Geopolitical Tensions Show Signs of Easing

Geopolitical developments in the Middle East remained a primary driver of short-term gold volatility last week. While renewed military exchanges early in the week triggered a sharp sell-off, the situation shifted dramatically. Reports emerged that a potential agreement between the involved nations could be signed, leading to the reopening of a key strategic waterway. This development prompted a swift reversal in gold, which rallied sharply from lows near $4,022 to reclaim ground above $4,200.

The positive news flow continued over the weekend, with official statements confirming the finalization of a memorandum of understanding aimed at de-escalation, with a formal signing anticipated. The international community welcomed the development as a critical step toward peaceful conflict resolution. In response, spot gold opened the new week with a significant gap up of over 2%.

Inflation-Driven Selloff May Have Peaked

Beyond geopolitics, unexpectedly strong U.S. inflation data applied significant downward pressure on gold last week. The May Consumer Price Index (CPI) rose 4.2% year-over-year, marking the largest annual increase in over a year. Concurrently, rising tensions in the oil-rich Middle East pushed crude prices higher, stoking fears that energy-led inflation could compel the Fed to maintain a hawkish posture.

These concerns were reinforced by the subsequent release of the Producer Price Index (PPI), which also came in hotter than forecast, showing a 6.5% annual increase—the largest in over 18 months. The combination of robust CPI and PPI prints presents the Fed with a complex scenario: resurgent inflation alongside a still-resilient labor market. The central bank's challenge is whether to maintain previous language hinting at future rate cuts or to acknowledge that inflation risks have moved back to the forefront of policy considerations.

Despite the bearish confluence of factors that drove gold below the key $4,200 level to its lowest point since last November, the selling intensity appeared to wane. A smaller-than-expected monthly increase in the PPI data triggered a intraday rebound on Thursday. This, coupled with the emerging signs of geopolitical de-escalation, helped gold consolidate and establish a more stable footing by week's end.

Technical Picture: Resistance Levels Loom

From a technical perspective, while gold has found tentative support above $4,000, it faces significant overhead resistance. A sustained move above $4,340 per ounce is needed to confirm the rebound's continuation, with further key resistance situated in the $4,450-$4,500 range. On the downside, immediate support lies in the $4,250-$4,200 zone, with the critical support area remaining between $4,100 and $4,000.

In domestic markets, gold has stabilized within the 880-900 yuan per gram range. Near-term resistance is seen between 935-950 yuan, with major resistance at 975-1,000 yuan. Support is located at 920-910 yuan, with key support at 900-880 yuan.

Domestic silver has rebounded after finding support at 15,000 yuan per kilogram. Resistance is anticipated in the 17,000-18,000 yuan range, with major resistance between 18,500-19,500 yuan. Support is watched at 15,800-15,500 yuan, with critical support at 15,000 yuan.