Gold futures bounced on June 25 as buyers stepped in after a brutal three-session selloff that drove prices from $4,129.90 on June 23 to $3,963.30 at the June 24 low. The recovery above $4,000 was driven by short-covering and physical buying at the discounted level, traders said.
The session saw the widest daily range in two weeks at $83.70, indicating heightened volatility and indecision. The June contract has now dropped $358 from its all-time high of $4,377 touched on June 17, a decline of 8.2% in just eight trading days.
The selloff was triggered by a broad risk-on rotation in late June as equities rebounded and the US dollar strengthened. The dollar index rose to 106.2 on June 24, putting pressure on dollar-denominated commodities. However, gold's safe-haven bid re-emerged on June 25 as geopolitical risks in Eastern Europe and the Middle East remained elevated.
ETF flows turned negative this week, with the SPDR Gold Trust reporting outflows of 12.5 tonnes through Wednesday. Central bank buying, which supported gold during the 2025 rally, continued at a steady pace with the People's Bank of China adding 6 tonnes in their latest disclosure.
Gold at $4,040 looks like a bear-market rally within a larger correction. Buyers who need to lock in hedging contracts should wait for confirmation of a double-bottom above $3,950 before committing. The next support level is $3,900, with a break below that targeting $3,800âthe 50-day moving average.