Is gold bulls poised for another rebound?
2026-06-24 18:34:24
On Wednesday (June 24), spot gold opened higher but continued to decline under pressure, fluctuating downwards throughout the day and breaking below the 4060 level, with a daily drop of more than 1.25%. The price traded below the intraday average price line throughout the day, and the RSI indicator fell back into the weak zone, indicating that the market was dominated by bears.
Gold is poised for its fourth consecutive monthly decline, which would be its longest losing streak since September 2022. This month's drop is again expected to exceed 10%, potentially marking the second-worst monthly performance this century. Meanwhile, despite continued high price volatility, monthly volatility is declining, perhaps indicating a stabilizing market.
Seasonal pattern: Gold's June drop hit a record low.
Seasonally, June is typically a month of decline for gold prices: the average and median returns for the month are negative, and profit margins are relatively low. Since 2000, gold prices have fallen in 60% of Junes, with an average decline of -3.5%. Given that gold prices have already fallen by more than 10% this month but remain above support levels, it is possible that some losses will be recovered before the end of the month.
COT Report: Gold Short Positions Shrink Significantly as Positioning Improves
It's also worth noting that speculative activity shorting gold in the CME futures market has decreased significantly. Net short positions held by managed funds have fallen to their lowest level since 2022; while short positions held by large speculators are at their lowest level since January 2025. Although long positions remain low by historical standards, this figure is gradually rising, thereby increasing the net long position size of both types of investors.
The number of open contracts has also been declining in recent months, suggesting that the drop in gold prices is not primarily due to large-scale new short selling. In fact, the trend is more like both long and short positions being gradually closed out. However, the total number of open contracts has increased in the past few weeks, suggesting that more people may be starting to buy gold as prices continue to hold above $4,000.
The options market suggests that the underlying asset possesses resilience.
Furthermore, the risk reversal indicator remains above recent lows, and its value is also higher than those low levels. This can be seen as a positive divergence between options traders and spot gold prices. Overall, demand for put options is currently far less strong than it was a few weeks ago. This situation further suggests that gold is unlikely to fall below the $4,000 mark.
Technical Analysis
(4-hour chart of spot gold source: EasyForex)
On the 4-hour chart, gold is in a standard downtrend. Since the high of 4382, it has broken through various Fibonacci support levels. The medium and long-term moving averages are all pointing downwards, and the price continues to be pressured below the Bollinger Middle Band and close to the Bollinger Lower Band. The MACD death cross continues, and the bearish green bars continue to expand. The RSI has fallen to 28 and entered the oversold zone, but there is no bottom divergence. The downward momentum has not yet exhausted, and the bearish dominance is clear.
The first short-term support is the previous intraday low of 4050.35, which is the primary defense level for the bulls. If this level is broken, the next support levels to watch are the previous low of 4024 and the important psychological level of $4000. $4000 is a very strong psychological defense line, and once it is breached, the downside potential will be fully opened up.
If a short-term weak rebound occurs after overselling, the upside potential will be limited, with strong resistance concentrated around 4150. This range not only corresponds to the 0.382 Fibonacci retracement level of 4161, but also overlaps with the Bollinger Middle Band at 4142, forming a double resistance from both moving averages and Fibonacci levels, which is basically the limit of this rebound. A slight rebound will first encounter resistance at 4109 (the 0.236 level), and only by stabilizing above the Bollinger Middle Band will the short-term bearish pressure be alleviated.
At 18:31 Beijing time, spot gold was trading at $4,061.66 per ounce, down 1.18%.
Gold is poised for its fourth consecutive monthly decline, which would be its longest losing streak since September 2022. This month's drop is again expected to exceed 10%, potentially marking the second-worst monthly performance this century. Meanwhile, despite continued high price volatility, monthly volatility is declining, perhaps indicating a stabilizing market.
Seasonal pattern: Gold's June drop hit a record low.
Seasonally, June is typically a month of decline for gold prices: the average and median returns for the month are negative, and profit margins are relatively low. Since 2000, gold prices have fallen in 60% of Junes, with an average decline of -3.5%. Given that gold prices have already fallen by more than 10% this month but remain above support levels, it is possible that some losses will be recovered before the end of the month.
COT Report: Gold Short Positions Shrink Significantly as Positioning Improves
It's also worth noting that speculative activity shorting gold in the CME futures market has decreased significantly. Net short positions held by managed funds have fallen to their lowest level since 2022; while short positions held by large speculators are at their lowest level since January 2025. Although long positions remain low by historical standards, this figure is gradually rising, thereby increasing the net long position size of both types of investors.
The number of open contracts has also been declining in recent months, suggesting that the drop in gold prices is not primarily due to large-scale new short selling. In fact, the trend is more like both long and short positions being gradually closed out. However, the total number of open contracts has increased in the past few weeks, suggesting that more people may be starting to buy gold as prices continue to hold above $4,000.
The options market suggests that the underlying asset possesses resilience.
Furthermore, the risk reversal indicator remains above recent lows, and its value is also higher than those low levels. This can be seen as a positive divergence between options traders and spot gold prices. Overall, demand for put options is currently far less strong than it was a few weeks ago. This situation further suggests that gold is unlikely to fall below the $4,000 mark.
Technical Analysis
(4-hour chart of spot gold source: EasyForex)
On the 4-hour chart, gold is in a standard downtrend. Since the high of 4382, it has broken through various Fibonacci support levels. The medium and long-term moving averages are all pointing downwards, and the price continues to be pressured below the Bollinger Middle Band and close to the Bollinger Lower Band. The MACD death cross continues, and the bearish green bars continue to expand. The RSI has fallen to 28 and entered the oversold zone, but there is no bottom divergence. The downward momentum has not yet exhausted, and the bearish dominance is clear.
The first short-term support is the previous intraday low of 4050.35, which is the primary defense level for the bulls. If this level is broken, the next support levels to watch are the previous low of 4024 and the important psychological level of $4000. $4000 is a very strong psychological defense line, and once it is breached, the downside potential will be fully opened up.
If a short-term weak rebound occurs after overselling, the upside potential will be limited, with strong resistance concentrated around 4150. This range not only corresponds to the 0.382 Fibonacci retracement level of 4161, but also overlaps with the Bollinger Middle Band at 4142, forming a double resistance from both moving averages and Fibonacci levels, which is basically the limit of this rebound. A slight rebound will first encounter resistance at 4109 (the 0.236 level), and only by stabilizing above the Bollinger Middle Band will the short-term bearish pressure be alleviated.
At 18:31 Beijing time, spot gold was trading at $4,061.66 per ounce, down 1.18%.
- Risk Warning and Disclaimer
- The market involves risk, and trading may not be suitable for all investors. This article is for reference only and does not constitute personal investment advice, nor does it take into account certain users’ specific investment objectives, financial situation, or other needs. Any investment decisions made based on this information are at your own risk.
