Gold may face another tough test as the inflation indicator favored by the Federal Reserve will be released this week.

The core PCE data to be released on Thursday may show that the inflation indicator most favored by the Fed has accelerated both month-on-month and year-on-year in May. If this is indeed the case, it will further support the view that policymakers need to tighten policy, which could push up the US dollar and US bond yields. For gold, this will be a unfavorable environment. Gold has been performing poorly recently, falling for three consecutive weeks. In the current quarter, the spot price has already fallen by about 10%, potentially marking the worst performance in nearly a decade.