Gold Price Trend Forecast: US-Iran Uncertainty Coupled With June Non-Farm Payrolls, Gold Price May Fall to $3,500

TradingKey - As of today (June 30) during the Asian session, gold ( XAUUSD) extended its recent downward trend, with intraday gold prices briefly breaking below $4,000 to hit a new year-to-date low, falling to as low as $3,942.50. The primary reasons for today's decline in gold are: uncertainty surrounding the US-Iran situation has heightened inflation expectations; furthermore, the non-farm payrolls data scheduled for release this Thursday may reduce market liquidity, putting further pressure on gold's upward movement.

US-Iran situation fraught with uncertainty; non-farm payrolls emerge as the next key variable for gold.

Fro m a fundamenta l perspective, the recent instabili ty in US-Iran r elations has exe rted significan t downward pres sure on gold pr ices. Last week end, the US and Iran exchanged fire again, te mporarily shatt ering market ex pectations of a continuous coo ling of Middle East tensions. However, both sides subseque ntly signaled a desire to pre vent the situa tion from spir aling out of c ontrol and are scheduled to b egin talks in Qatar today.

However, Tru mp's stance on Iran remains t ough. Trump wa rned that if I ran continues to take provoc ative actions, the US retains the possibili ty of further military respo nses. Iran's s tance is equal ly firm, but i t has not show n a willingnes s to immediate ly escalate th e conflict int o a full-scale one. Iranian officials emph asized that US actions have u ndermined regi onal stability and stated th at Iran will s afeguard its o wn security in terests.

Against the backdrop of to ugh rhetoric f rom both sides , although the two parties a re set to begi n talks in Qat ar today, gol d prices have continued to d ecline. The ma rket's reactio n reflects tha t investors' e xpectations of the talks yie lding a de-esc alation are fr aught with unc ertainty.

In addition to the US-Ira n situation, t he June non-fa rm payrolls da ta to be relea sed by the US this Thursday will serve as a key catalys t for the next phase of gold 's price actio n. The market currently wid ely expects th at job growth in June may sl ow down signif icantly from M ay's 172,000, with the fore cast range rou ghly between 1 00,000 and 11 5,000, while the unemployme nt rate is exp ected to remai n around 4.3% or rise slight ly to 4.4%.

If the June non-farm payro lls data is st ronger than ex pected, especi ally if job gr owth is signif icantly higher than market e stimates while wage growth r emains resilie nt, the marke t may further raise expectat ions of the Fe deral Reserve raising rates or keeping int erest rates hi gher for longe r. Consequentl y, the US doll ar and Treasur y yields could continue to s trengthen, an d gold would f ace a new roun d of downward pressure, wit h the $4,000 threshold pote ntially turnin g from a suppo rt level into a resistance l evel on a rebo und.

Conversely, if the payrol ls data weake ns significant ly, with job g rowth falling below 100,00 0, the unemplo yment rate ris ing, and wage growth slowin g, the market will likely t rade on the co oling of the U S labor market and the possi bility of a Fe d policy pivot again. Under this scenario , the US doll ar and Treasur y yields may p ull back, offe ring gold an o pportunity fo r a temporary recovery.

Gold Price Trend Analysis: Overall Bearish Trend, Gold Prices May Fall to $3,500

Gold price daily chart, Source: TradingView

According to the daily chart of gold, after rebounding for two consecutive trading sessions last week, gold prices weakened again on Monday below the resistance level of $4,070. Today, gold prices broke back below the $4,000 threshold, hitting a new year-to-date low of $3,942.50, which suggests that overall market sentiment leans bearish and gold prices are poised for further declines.

Currently, following today's break below last week's low, further downside room has opened up for gold. The primary target for the decline is the support zone of $3,900-$3,850. Should gold fail to hold this support level of $3,850, the path toward the $3,560-$3,500 range will be cleared.