Will Gold’s Historical Bearish Pattern in June Persist This Year?

Summary:

Mixed fundamentals are driving wide fluctuations in gold prices. Given gold’s historically bearish performance in June, the short-term outlook remains neutral to bearish.

SELL XAUUSD

Close Time

CLOSED

3348.00

Entry Price

3215.00

3376.00

4667.51 -47.39 -1.01%

254.7

Pips

Profit

3215.00

3322.53

Exit Price

3348.00

Entry Price

3376.00

Fundamentals

Gold prices staged a modest rebound on Monday, paring losses from the near 2% sell-off over the previous two trading sessions.

Last week, gold’s rally lost momentum and reversed sharply after briefly testing the $3,400 level. A key factor behind the decline was the easing of U.S.-China trade tensions following the first phone call between their leaders.

However, deteriorating macroeconomic conditions failed to lift gold prices. A string of weak economic indicators last week pointed to a slowdown in U.S. economic growth, further strengthening expectations of over 50 basis points in Federal Reserve rate cuts.

Key data showed that U.S. nonfarm payrolls for May (seasonally adjusted) increased by 139,000—the lowest reading since February. While above the market forecast of 130,000, it fell significantly short of the average final value of 200,000. The early impacts of President Trump’s global trade war appear to be manifesting in the labor market, manufacturing, consumer spending, and the broader service sector.

The failure of these bearish macro signals to boost gold prices is likely due to technical reasons. Despite a previous breakout from a triangle consolidation and a developing inverse head-and-shoulders pattern, gold still failed to sustain its upward trajectory—something worth cautioning against.

Another critical observation: Over the past several years, gold prices have typically posted a bearish candlestick on the monthly chart in June. If this seasonal pattern persists, the recent strength in gold may be inconsistent with broader market behavior.

From a fundamental perspective, after months of declining inflation indicators, investors are hoping the Fed will not hesitate to cut rates should the economy falter. However, there are also arguments for maintaining the current policy stance, at least until after the July 9 reciprocal tariff deadline, by which time a clearer trade agreement might emerge.

Since inflation remains above the Fed’s 2% target, policymakers may be reluctant to lower borrowing costs prematurely—especially with the possibility of renewed trade tensions.

This Wednesday’s U.S. CPI report for May will test the rising optimism over potential rate cuts, as it may indicate whether the recent disinflationary trend has stalled. According to the Cleveland Fed’s Nowcast model, the headline CPI is expected to rise 2.4% YoY in May, up from April’s 2.3%, while the core CPI is forecast to remain steady at a 2.8% YoY pace.

Will Gold’s Historical Bearish Pattern in June Persist This Year?_1

Technical Analysis

After last week’s sharp retreat, gold started the week on a weak note, facing a third consecutive day of selling pressure following a false breakout above a bullish pennant pattern.

Momentum indicators suggest ongoing weakness. The stochastic oscillator is declining steeply but has yet to enter oversold territory, while the RSI remains slightly above the 50 mark. This neutral-to-bearish setup is clearly reflected in the price action.

In line with historical patterns, the strategy remains to sell on rallies.

Trade Recommendations

Trading Direction: Sell

Entry Price: 3348

Target Price: 3215

Stop Loss: 3376

Valid Until: June 24, 2025 23:55:00

Support: 3294/3272/3245

Resistance: 3333/3346/3350

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