Crisis! Gold Prices Lose Direction, Predicted Not to Reach US$ 4,900
Gold prices are highly volatile as market participants continue to monitor developments in the Middle East conflict and United States economic data to assess their impact on monetary policy. According to Refinitiv, gold prices closed at US$ 4,484.59 per troy ounce on Tuesday (2/6/2026), representing a slight increase of 0.03%, reversing a 1.16% decline seen on Monday.
Despite the slight recovery, gold prices fell further on Wednesday (3/6/202<0xC2>6) at 06:31 WIB, trading at US$ 4,469.76 per troy ounce, a decrease of 0.33%. Fawad Razaqzada, an analyst at Forex.com, stated that the direction of gold prices now depends on movements in oil prices, bond yields, and the US dollar, all of which are linked to the situation in the Middle East. He noted that the gold market currently lacks direction as investors await new signals, particularly regarding the ongoing Middle East conflict.
Iranian media reported that Tehran is reviewing a proposal for a deal with the US to halt the war, although communication with Washington has been absent for several days. This report follows statements from US President Donald Trump indicating that negotiations are ongoing. Since the conflict began, gold prices have been under pressure due to surging energy prices, which have triggered inflation concerns and expectations that interest rates will remain high. Although gold is typically viewed as an inflation hedge, its appeal tends to weaken during periods of high interest rates because gold provides no yield.
Key data for this week includes the ADP employment report on Wednesday and US payroll figures on Friday. The market will scrutinise these figures for clues regarding the Federal Reserve’s policy direction. Recent data showed that US job vacancies rose higher than expected in April, even though recruitment has slowed due to ongoing economic uncertainty.
Commerzbank now forecasts gold prices to reach US$ 4,800 per troy ounce by the end of this year, down from its previous projection of US$ 5,000. However, the bank maintains a projection of US$ 5,200 by the end of 2027, assessing that the fundamental supporting factors for gold remain strong. ‘In addition to the lower gold price projection, weak industrial demand for silver also indicates slightly lower silver prices,’ Commerzbank wrote.