Gold holds $4,000 support as death cross tests bullion bulls

Gold held $4,023 per ounce in Monday trading, defending the $4,000 support level for a third session as a death cross pattern looms over the market.

"The market is shrugging off news that should lift it, which tells us it's waiting for a trigger to move lower," Przemyslaw Radomski, CFA at Golden Meadow, said.

The 50-day moving average is approaching a crossover below the 200-day moving average, a pattern known as a death cross that traders view as a bearish signal. Gold has failed to rally despite the dollar index holding at 100.60, June CPI falling 0.4% — the largest one-month decline since April 2020 — and producer prices dropping 0.3% against expectations of no change. The odds of a July rate hike collapsed from above 40% to near 10%, according to the CME FedWatch tool.

The metal's inability to gain traction on a weaker dollar and two soft inflation prints suggests the next move is lower, with a break below $4,000 potentially accelerating selling toward the $3,900 area last tested in May.

Warsh Testimony Keeps Hawkish Bias Alive

Federal Reserve Chair Kevin Warsh testified before the House and Senate this week and refused to declare victory on inflation despite the soft CPI and PPI readings. He told lawmakers there might be some who look at the data and say mission accomplished, adding that this is not his view. Markets still expect the Fed to raise rates before year-end, keeping real yields elevated and non-yielding gold at a disadvantage.

Silver traded at $56.78 per ounce, below its Monday close of $57.50, underperforming gold and pointing to broader weakness across the precious metals complex. Bitcoin, by contrast, tore past $65,000 on the same inflation data, highlighting gold's relative underperformance.

The US-Iran conflict has escalated for a fifth straight day with American strikes on Iran and air defenses firing over Tehran. Iran's foreign ministry said it has no plans to negotiate, and the US military disabled an empty tanker heading for Kharg Island. Gold barely reacted, gaining less than $25 from Monday's open — a muted response that analysts said confirms the metal is ignoring bullish catalysts.

COMEX gold futures settled at $4,028.37, up 0.24% on the session, while silver futures added 1.41% to $57.118. The dollar index edged up 0.02% to 100.602.

This article is for informational purposes only and does not constitute investment advice.