The price of gold has plunged into a bear market, with Citi analysts now forecasting a potential drop to $3500 per ounce.
During Asian trading hours on Thursday, June 11th, both spot and futures gold prices breached critical support levels. The August gold contract on the New York Mercantile Exchange closed down 3.6% at $4,133.30 per ounce. According to Dow Jones data, this marks its lowest closing level since November 2025 and represents a decline of over 20% from its March peak. A 91-day period confirms its entry into bear market territory, the fastest such transition since the peak of the 2008 financial crisis (which took 23 days). During the session, prices briefly fell below $4,100, touching their lowest point since last November.
Key Market Drivers
The transmission mechanism of the US-Iran conflict is leaning more towards "energy-inflation-tightening" rather than pure safe-haven demand. The protracted conflict involving the US, Israel, and Iran has pushed oil prices higher, leading markets to link persistent inflation with central banks maintaining higher interest rates for longer. The CME FedWatch Tool indicates a roughly 98.2% probability of no change at next week's FOMC meeting, but traders have already priced in a rate hike starting in December. Concurrently, an ECB rate hike of 25 basis points this week is almost a consensus view according to LSEG data. ING analyst Manthey points out that when oil prices push up inflation expectations and real yields follow, it creates a direct headwind for zero-yielding assets like gold and silver—geopolitical risk premiums are being suppressed by macro interest rates. Analysts from FXTM and Zaye also emphasize that the market is truly embracing yield-bearing assets like US Treasuries, increasing the opportunity cost of holding gold.
Last Friday's stronger-than-expected jobs data further solidified expectations for rate hikes, triggering broader asset selling pressure. Analysts from Altavest and Wave note that the recent correlation between gold and the Nasdaq 100 (per FactSet) has surged to about 0.91, resembling a concentrated unwinding driven by margin/leverage calls: when positions become excessively crowded, even "safe-haven/long" assets are sold to cover losses. Technically, both gold and silver have broken below their 200-day moving averages—a signal that has historically prompted systematic/risk-control funds to initiate selling programs, accelerating the downward momentum.
Citi lowered its three-month price target to $4,000 this month and warned that if the Strait of Hormuz stalemate persists into late summer, a test of $3,500 cannot be ruled out. However, Alex King from Wellington Management cautions that the foundation for gold's bull market since late 2022 has been central bank reserve diversification. This pool is much smaller than that for US Treasuries, and continued "minor rebalancing" by key holders could provide long-term bottom support. Once US dollar strength reverses, gold's narrative as an alternative store of value will regain prominence. Altavest offers a more cyclical perspective: in 2008, gold initially sold off alongside risk assets but bottomed in November and rallied thereafter. Their view remains that pressure will persist in June, but the macro environment in the second half of the year is more likely to shift back in favor of gold.
Latest Gold Futures Market Analysis
On the weekly chart, last week's NYMEX August gold contract closed with a large bearish candlestick with a full body, decisively breaking below the key support level of $4,400. This shattered the high-level consolidation range maintained for four months in the first half of the year. This week's opening gap down further confirmed the validity of the breakdown. The MACD indicator formed a death cross at high levels, with the green histogram expanding rapidly, indicating abundant overall bearish momentum. Today's rebound is merely a technical correction following the breakdown and does not reverse the medium-term bearish trend established on the weekly chart. The medium-term downtrend channel is now fully open.
On the daily chart, after yesterday's high-volume decline below the $4,100 level, today's price action showed a low open followed by a higher close, forming a small bullish candlestick with a long lower shadow, finding temporary support around the November 2023 low of $4,062. This suggests some technical buying support at that level. However, all short, medium, and long-term moving averages remain in a complete bearish alignment. The 5-day moving average is declining steeply, and the current price remains below all moving averages; the rebound has not altered the bearish structure on the daily chart. The KDJ indicator has slightly recovered from yesterday's deeply oversold territory, indicating a need for technical correction, but it has not yet formed a clear bullish crossover signal. The corrective momentum remains weak overall.
On the 4-hour chart, after rebounding from the low of $4,062, the price is currently testing short-term resistance around $4,150. The MACD has formed a bullish crossover at low levels, with the red histogram gradually expanding, suggesting the short-term rebound momentum is not yet exhausted. However, the $4,150 level, which was previously support, has now turned into strong resistance, likely containing a large number of stop-loss sell orders placed after yesterday's breakdown, making a one-time breakthrough difficult. If the rebound fails to sustain above $4,150, the subsequent trend is likely to resume its downward path. The first support below remains today's low of $4,062. A break below this level would open the way for a further test of the $4,000 psychological support level.