Gold Trading Reminder: US-Iran Doha Talks May Face Changes, Gold Prices Retreat Below the 4000 Level Again—Are the Bulls Finished?

　　

The global gold market is experiencing a severe shock. On Monday (June 29), prices once plunged nearly 2% to test the 4000 level, eventually closing down 1.58% at about $4016.45 per ounce. August US gold futures also fell 1.4%, settling at $4038.9. This decline highlights how gold’s status as a traditional safe haven asset is under severe challenge from the triple pressures of geopolitical conflict, economic data expectations, and monetary policy. In Asia’s early session on Tuesday (June 30),

　　US-Iran tensions escalate: Rising oil prices and inflation clouds shroud markets

　　

　　Although the market still expects energy shipments through the Strait of Hormuz to be restored, repeated conflict has undoubtedly amplified uncertainty in the global supply chain. The rise in oil prices directly translates into higher inflation expectations, dealing a double blow to the gold market. On one hand, geopolitical risk theoretically supports safe-haven demand for gold; on the other, inflation fears reinforce expectations of Fed rate hikes, and a higher interest rate environment typically suppresses the performance of non-yielding assets such as gold.

　　Meanwhile, US-Iranian negotiations in Qatar are full of uncertainty. Trump stated that Iranian and US technical teams are heading to Doha, but Iran’s Foreign Ministry has made clear there will be no formal talks with the US in the coming days. The two sides even disagree on whether to meet at all, highlighting the fragility of the temporary ceasefire reached on June 17. This agreement was originally intended to pause four months of conflict and provide a framework for shipping safety in the Strait of Hormuz, the Iran nuclear issue, and asset unfreezing. However, despite President Pezehkizian calling the agreement a “great victory” and mentioning that $6 billion in frozen assets would soon be released, lack of mutual trust and repeated attacks in actual implementation have cast a heavy shadow over the outlook.

　　Fed’s hawkish stance and strong dollar: Core logic behind gold’s pressure

　　The deeper reasons for gold’s decline go far beyond the geopolitical conflict. The Fed kept interest rates unchanged at its meeting this month, but policymakers have sent clear signals that rate hikes are possible later this year. The market interpreted this as more hawkish, especially under the new chairman Waller’s leadership, with the Fed striving to address inflation well above the 2% target.

　　

　　The bond market also reflects this dynamic. US Treasury yields have risen slightly, with the 10-year yield edging up to about 4.378% and the 2-year yield rising 2.5 basis points to 4.113%. Although the recent retreat in oil prices once eased inflation expectations, the market believes the Fed needs more solid evidence to confirm inflation is falling. Analysts note that price pressures associated with artificial intelligence may continue to raise inflation risks, further reinforcing the hawkish narrative.

　　Upcoming employment data: Market focus turns to Fed policy clues

　　For the rest of this week, investors will closely watch US labor market data. Wednesday’s ADP employment report and Thursday’s nonfarm payrolls will be key indicators. The market generally expects about 110,000 jobs added in June, with the unemployment rate remaining at 4.3%. If the data are strong, it will further support the Fed’s stance of keeping rates higher for longer, and gold may be under pressure to hit new lows.

　　Peter Grant, senior metals strategist at Zaner Metals, noted that the market is digesting both Middle East tensions and the Fed’s hawkish stance. The strength of the employment data will directly determine whether gold continues to head lower. In the past few months, stronger-than-expected jobs data has repeatedly pushed the Fed to a tougher monetary policy path, while signs of a labor market recovery seem to be easing dovish concerns over an economic slowdown.

　　Gold outlook: Uncertainty amid safe-haven versus rate-hike tensions

　　Overall, the gold market is currently in a complex situation of tug-of-war between safe-haven demand and rate-hike pressures. While repeated US-Iran tensions offer short-term support potential for gold, inflation fears transmitted by oil prices and a strong dollar create stronger headwinds. The safety of shipping through the Strait of Hormuz, Iran’s asset unfreezing process, and the Trump administration’s interventions in Fed appointments (such as the Supreme Court refusing Trump’s dismissal of Governor Cook), will all continue to shape market sentiment.

　　In the short term, if this week’s employment data exceeds expectations, gold remains at risk of further decline; conversely, if the data are weak or geopolitical conflicts ease, gold could see a rebound. In the medium to long term, the Fed’s actual rate hike trajectory, global economic growth, and the eventual outcome of Middle East peace negotiations will together determine gold’s destiny.

　　

Editor: Guo Jian