Today, Tuesday (June 9), during the Asian session, spot gold is rebounding on support from the $4,300 level and trading at $4,335.83/oz, equivalent to 945.13 yuan/gram. It is up $6.50 from the previous session, or about 0.15%.
This rebound was driven by short-covering and bargain buying, but the recovery remains weak and has still not broken through the short-term resistance at $4,350. Trading is generally thin, and investors are waiting for Wednesday's U.S. May CPI data to confirm the Fed's policy path. Neither bulls nor bears are willing to open large positions, so the market remains in a tight consolidation range.
The market's main narrative is now fairly unified: the blowout nonfarm payrolls report revived rate-hike expectations, gold broke below the 200-day moving average, and bulls fled in unison. Many in the market now believe the Fed's 'higher for longer' policy has already sentenced gold to defeat.
But WisdomTree's head of commodities and macro research, Nitesh Shah, holds a different view. He says the key driver of gold prices is not the Fed's rate hikes themselves, but real interest rates. If inflation stays above the Fed's control range, gold could instead stage a reversal to the upside.
CME FedWatch data show the market has already priced in a rate hike as early as October, with the probability approaching 50%. Just one month ago, the market was widely betting on a Fed cut. This swing in rate expectations directly pierced gold's key technical support and triggered algorithmic selling, making the short-term bearish logic very clear.
But the market is ignoring the core issue: when market rates stay high and inflation keeps rising, real interest rates are continuously eroded and can even turn negative. Looking back at history, gold often performs strongly during periods when real rates are falling or negative.
Shah clearly identified two major forces supporting gold prices. First is energy: global crude inventories have fallen rapidly from very high levels, and when inventories are low, oil prices are easily hit by supply shocks. Combined with the supply premium from tensions in the Middle East, commodity inflation risks a second rise.
Second is inflation divergence: AI-driven efficiency gains only suppress services inflation and cannot offset pressure from goods inflation, so the high-price market environment is unlikely to fade quickly.
In addition, U.S. economic growth and debt are providing double support for gold. High rates continue to weigh on economic vitality, slowing the U.S. economy and lifting recession risk, which in turn boosts safe-haven demand and gives gold a natural floor.
At the same time, interest payments on U.S. government debt are now approaching the scale of defense spending, raising worries about fiscal sustainability. Combined with continued central-bank gold buying, this is building a solid hidden floor under gold prices. Shah also doubts the feasibility of large-scale balance-sheet reduction; if growth later comes under pressure and fiscal deficits become more visible, the market is likely to shift back toward easing expectations.
Overall, gold's current decline looks more like a temporary shakeout before inflation expectations rise again. The core long-term bullish logic has not been broken and still rests on four pillars: falling real-rate risk, recession hedging, concerns over dollar debt credit quality, and continued central-bank buying.
Shah believes that if inflation stays above market expectations over the next year, market demand for physical monetary assets may restart, and gold could recover much of the recent thousand-dollar drop. For long-term positioning, this sharp selloff is not a trend reversal, but a window to build positions at lower levels.
Latest spot gold market analysis
From a technical perspective, spot gold still shows a clear bearish structure in the short term, and the overall trend remains biased to the downside.
The daily chart shows gold continues to trade below the major moving averages, confirming the bearish trend structure.
The Relative Strength Index (RSI) is currently around 34, close to oversold territory, which means downside momentum has eased somewhat, but bears still dominate the tape.
The Average Directional Index (ADX) is close to 28, indicating that the current downtrend has taken shape, but there is not yet a sign of panic-style capitulation selling.
On the resistance side, the first key barrier is the area near the 200-day moving average at $4,436. If gold can hold above that level, short-term selling pressure would ease effectively.
Further resistance higher up is around the 50-day moving average near $4,624, followed by the 100-day moving average near $4,793.
On the support side, the $4,100 area is the core support zone. If gold unexpectedly loses this support, spot gold will begin a new round of decline and downside risk will intensify further.
