Gold recorded its steepest monthly decline since 2013, reversing a record-setting rally as US military strikes against Iran lifted energy prices and stoked inflation concerns, pushing investors toward other assets. Despite the geopolitical flare-up in the Middle East, gold failed to hold its traditional safe-haven bid, suggesting the prior rally had stretched valuations significantly. China's central bank and institutional buyers moved aggressively to accumulate on the dip, adding a structural demand floor beneath the selloff.
A sharp pullback in gold after a historic run creates a potential re-entry point for investors who missed the original rally, but the Iran-driven energy spike complicates the picture by raising real yields expectations. Gold miners — already leveraged to the metal's price — face amplified downside pressure in the near term. If China's buying proves sustained, it signals continued sovereign diversification away from dollar assets, which is a medium-term structural support for gold prices.
Watch for the next US CPI inflation report (~mid-Jul) and any Federal Reserve commentary on rate path following the energy price spike. Monitor China's monthly gold reserve update from the People's Bank of China, typically released in the first week of each month.
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