The US consumer price index (CPI) rose to 4.2% year-on-year in May, as widely expected, the highest level since April 2023. This inflation data is likely to increase investor concerns about the possibility of an interest rate hike at any Federal Reserve monetary policy meeting in the second half of this year. This interest rate factor should continue to dampen investor appetite for gold in the short term, putting downward pressure on gold prices.

On the other hand, the ongoing conflict between the US and Iran, coupled with investor concerns about a continued surge in oil prices and a renewed instability in the region, should increase investor concerns about cashing out in the gold market to hedge against risk. This is likely a significant factor that could push gold prices below $4,000 in the short term.

A short position can be established around $4,112, with a short-term target of $3,950 for profit-taking and a stop-loss at $4,132.

Gold Price 1-Hour Chart:

Ferris Kwok

Chief Analyst
Success Finance Group

Email: ferris.kwok@successfn.com