Gold Price Prediction: Trends and Insights for June 2025
Understanding Gold Price Fluctuations
Gold price prediction: Traders need to take cognizance of the ongoing US-China trade deal talks. (AI image)
Gold prices are likely to keep changing due to the US-China trade talks. Geo-political uncertainties add to this volatility. Where are gold prices headed in the short-term? What should investors watch out for?
Gold Performance
Top trade officials from the US and China started talks in London on Monday. Gold prices went up on Monday because the US Dollar was weaker. The MCX August gold contract was at Rs 97,200, up by 0.16% that day.
Earlier, spot gold prices fell by 1.25% to close at $3,310 on Friday. This happened because the US non-farm payroll report for May was better than expected. However, the details were not so good.
Easing US-China trade tensions put more pressure on gold. Even though gold fell for two straight days on June 5 and June 6, it closed nearly 0.63% higher for the week ending June 6.
The metal rose to $3,403 on June 5, the highest since May 8. Traders bought more gold for safety as US-China tensions increased.
US-China Trade Talks Begin in London
US Treasury Secretary Bessent, Commerce Secretary Lutnick, and US Trade Representative Greer met a Chinese team led by Vice Premier He Lifeng on Monday at London’s Lancaster House. The presence of high-profile US officials shows the US is willing to ease some export rules to China. This could include technical supplies and jet engine parts. In return, China may ease rare earth exports to the US.
Gold ETF Holdings
Total known global gold ETF holdings were at 88.394 million ounces as of June 6. ETF holdings saw net inflows for the second week in a row after five straight weeks of outflows. ETF holdings are up around 6.70% since the start of the year.
Gold Data Roundup
China’s inflation data released on Monday showed that China’s CPI for May declined by 0.1% year-over-year. This was better than the forecast of -0.2%. It was the fourth straight monthly decline as the Chinese economy struggles with weak demand due to the trade war.
China’s factory deflation continued for the 32nd straight month. The PPI for May declined by 3.3% year-over-year, worse than the estimate of 3.2% and a 2.7% decline in April. Deflation will continue unless consumer demand picks up.
China’s exports slowed from 8.1% year-over-year in April to 4.8% year-over-year in May. This was worse than the forecast of 6%. Shipments to the US declined by 34% year-over-year, worse than a 21% decline in April. Chinese imports also dipped by 3.4% year-over-year due to trade uncertainty, worse than the forecast of a 0.8% decline.
The US non-farm report for May was somewhat better than expected. US employers added 139,000 jobs, more than the forecast of 126,000 jobs. The unemployment rate held steady at 4.2%. Average hourly earnings rose by 0.4% month-over-month and 3.9% year-over-year, better than the estimates of 0.3% and 3.7% respectively.
However, the two-month payroll net revision showed a decline of 95,000 jobs. The labor force participation rate slid from 62.6% to 52.4%. The household survey reflected a weakening job market. Even as the population increased by 188,000, the labor force dropped by 625,000. Thus, even though employment fell by 696,000, the unemployment rate held steady at 4.20%.
Upcoming Data
Traders will closely watch the US CPI and PPI data for May, to be released on June 11 and June 12 respectively. This data will give clues about the Fed’s rate cut plans.
US Dollar and Yields
The US Dollar Index was at 98.95, down nearly 0.24% on the day. The Index fell by 0.14% in the week ending June 6. Ten-year and 30-year US yields were a bit lower at 4.48% and 4.95% respectively.
Weekly CFTC Data
Money managers increased their net bullish gold bets to a seven-week high in the week ending June 3.
China Buys Gold for the Seventh Straight Month
China’s gold reserves went up for the seventh month in a row. The People’s Bank of China bought around 2 tons of gold in May. China’s gold holdings reached 73.80 million ounces at the end of May.
Gold Price Outlook
The threat of deflation in China’s economy, positive ETF inflows, and a not-so-strong US non-farm payroll report for May are good for gold. However, in the near term, gold prices will take cues from the ongoing US-China trade talks in London. Positive outcomes from the talks will weigh on gold. In that case, gold may fall to as low as $3,260 (Rs 95,000).
There may be some positive developments in the trade deal talks. In that case, gold may decline to test the support at $3,292. However, a full resolution of all trade-related issues seems unlikely for now. Traders need to keep an eye on the ongoing US-China trade deal talks. Meanwhile, a light sell position can be started with proper risk management.
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