XAUUSD+ dips below $4k - again. Here's gold's forecasts for next week.



Gold has struggled to escape the strong gravitational pull around the $4,000 mark.

Recall on June 24th, the precious metal dipped below that psychologically-important $4k price for the first time since November 2025.

In the ensuing 3 weeks since, any rebounds have been short-lived, though bullion has found support (prices not falling much further below) around the $4k levels.

Still, the precious metal remains on course for its 6th weekly drop over the past 7 weeks.

Furthermore, bullion backed ETFs (exchange-traded funds) have net sold nearly 2.6 million ounces of gold so far this year, as spot prices have fallen by 7.5% year-to-date.

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Why did gold fall this week?

Gold's weekly drop has been fueled by a return of inflation fears.

The latest waves of strikes and counterstrikes by the US and Iran sent Brent oil upwards this week, respecting our $86/bbl upside target set since this past Monday, July 13th.

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Here's how that relationship between oil and gold prices works:

• Rising oil prices stokes fears of an inflation resurgence

^{Higher oil prices leads to higher transportation costs for goods, and businesses may raise their selling prices to offset these higher costs i.e. inflation.}

• Rising inflation in turn raises prospects of Fed rate hikes

^{Raising interest rates is the Fed's main weapon for cooling down US inflation.}

• The prospects of higher US interest rates in turn weigh down gold prices.

^{Gold is a zero-yielding asset, which means investors do not get any interest payments from holding on to gold.}

• At the expense of gold, investors worldwide would hunt for assets that offer higher yields so as to offset higher inflation.

^{For instance, 10-year US Treasuries now offer yields of around 4.5-4.6% - their highest yields in over a year.}





Gold's outlook: July 17-24th

Bloomberg's model predicts a 73% chance that XAUUSD+ will trade between $3872 - $4130 between now and next Friday, July 24th (see levels in gold chart above)

POTENTIAL SCENARIOS

• UPSIDE: Gold could be restored back above the $4k and head towards the $4130 level if oil prices subside and US inflation fears abate. However, from a technical perspective, gold bulls (those hoping prices will go up) must also conquer the downward-sloping trendline that began from the May 12th intraday high.



• DOWNSIDE: Should the Iran war escalate further and extend oil's rebound, gold may be forced to remain in sub-$4k prices for longer, potentially reaching the $3872 downside target to mark a fresh year-to-date low.



For a slightly longer-term outlook, we re-iterate what we had written in last week's report ...

Should the $3900-$4000 region fail to hold, last year's price action suggests little friction for further downside till the $3500-$3600 region for spot gold.





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