Gold crashes to 9-month low: A relief bounce or sideways pause is possible

Gold prices have continued their decline, driven by renewed geopolitical tensions and reflecting broader regional weakness across global markets. The past three trading sessions have been particularly challenging for gold traders. During the Asian session, gold experienced a sharp drop, falling below $4,370 amid concerns over inflation and tightening monetary policy. After falling to around $4,366, the metal rebounded somewhat, but the momentum is weak. Looking ahead, volatility in the precious metals market is expected to remain elevated.

Gold fundamentals Today

In the near term, key data releases—including US Core PCE and GDP figures—are anticipated to significantly influence gold price movements. Both reports are scheduled for release at 12:30 GMT today and are likely to trigger heightened market volatility. These economic indicators could impact the Federal Reserve’s interest rate outlook and broader market sentiment. Meanwhile, ongoing geopolitical developments in the Middle East and persistent inflation concerns remain the primary drivers of market activity for the remainder of the week.

Gold Short-term Outlook: $4,300 the key support area to focus on

From a technical perspective, momentum suggests that gold may continue its downward trajectory today before potentially rebounding, as sellers currently appear to be in control. The Relative Strength Index (RSI) at 34 indicates a bearish bias, though the market has not yet entered oversold territory. The next support levels are in the $4,350/30 range, while the $4,320/00 zone is considered a critical demand area where oversold conditions may prompt a technical rebound during the upcoming US trading session.

In summary, gold has faced renewed selling pressure throughout the week. While a short-term retracement to the upside is possible, the overall bias remains negative as long as prices stay below the key resistance zone of $4,650/4700. Any gains are likely to be viewed as opportunities to establish new short positions in XAUUSD.

 

Warning! This material is not intended as investment advice. Past performance data does not guarantee future returns. Investing in foreign currencies may affect your returns due to their fluctuations. Any transaction in securities may result in both profits and losses. The assumptions and expectations set forth in this material are only estimates that may not be accurate and may change depending on current economic conditions. These statements do not guarantee future returns.