Gold price fell sharply to near $4,500: Will it rebound or fall further?

Gold prices have experienced considerable selling pressure over the past three sessions. Uncertainty regarding a potential new Federal Reserve regime, along with decreasing expectations for interest rate cuts, has led to ongoing weakness in the precious metal. At the same time, a shift in risk sentiment has diminished the immediate demand for gold as a safe-haven asset.

The medium-term trend remains mixed after a significant pullback; however, there are early signs of a possible short-term recovery. Gold prices have rebounded modestly following a test of the key demand zone at $4,510/00. Currently, gold is trading near $4,550 and has shown indecisive price action during the New York session, fluctuating between small gains and losses without establishing a clear direction.

Fed interest rate expectations shift and the US dollar recovery

​Markets have begun to scale back expectations for U.S. central bank rate cuts in 2026, as inflation remains more persistent than anticipated. This could lead the Fed to maintain higher interest rates for an extended period, making gold and silver less attractive due to their lack of yield. Furthermore, a stronger dollar is exacerbating downside pressure, with the dollar index headed for its first weekly gain after three straight losses, decreasing the attraction of non-yielding assets such as gold.

XAUUSD Technical Outlook

On the support side, the nearest critical support level for gold is $4,510/00. However, the bears require a confirmed daily closing below $4,450 to continue their downward momentum. A clear failure of this support might lead to further collapses to $4,350/40. On the other hand, despite the rebound, long-term buyers should wait for a 4-hour close above $4,660 before entering a long position. If the metal breaks and closes above $4,660, the next levels to watch are $4,720/30, followed by the key resistance range of $4,770/80.

Bottom Line

The upcoming trading sessions will be crucial in determining whether a deeper correction in precious metal risk is underway or if strong buyers will return near the $4,500 level. Meanwhile, ongoing developments in the Middle East continue to drive volatility, leaving gold vulnerable to news-driven fluctuations amid conflicting signals and an uncertain outlook.

 

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.