Gold price pulled back to the support area again. Time to re-enter?

Precious metals, including gold and silver, began the week on a bullish trajectory, supported by easing geopolitical tensions that contributed to a broader market recovery. However, prices declined slightly later on Monday as investors took profits following the recent surge. This pullback has prompted debate over whether it represents a temporary correction or the start of a more significant downturn.

Gold Remains Sensitive to Geopolitical Developments

Gold prices climbed above $4,100 on Monday morning, buoyed by a pause in hostilities between the United States and Iran over the weekend, which eased concerns about inflationary pressures. The metal recovered most of its losses from Thursday and Friday. Nevertheless, gold retreated slightly from these weekly highs as investors awaited further direction from the US Federal Reserve. At the same time, the ongoing geopolitical tensions between the US and Iran continue to inject uncertainty into the market. President Trump indicated that the US is engaged in “very deep talks” with Iran, while cautioning that military action remains a possibility if negotiations fail.

A Critical Week Ahead

This week features a busy calendar with end-of-month portfolio rebalancing, geopolitical events, and key economic data releases, suggesting continued volatility in the near term. The sustainability of gold’s gains will largely depend on remarks from Federal Reserve Chair Kevin Warsh, the performance of the US dollar, the forthcoming US Personal Consumption Expenditures (PCE) inflation report, ongoing geopolitical developments, and commentary from other Fed policymakers. Additionally, US Treasury yields and overall market risk sentiment will influence the US dollar’s trajectory, thereby impacting gold prices.

Gold (XAUUSD) Technical Forecast

The next two trading sessions will be crucial in determining whether gold is entering a deeper correction phase or if near-term buying interest will support prices above the $4,000 level. Notably, the metal’s recent rejection near $4,100 warrants close attention to assess the potential for further downside.

Following the rejection above $4,100, gold retreated to the $4,020 support zone. Despite this pullback, the upside momentum is expected to prevail as long as prices remain above $3,960. Traders should watch for value-driven buying activity supporting the price above $4,000 to initiate fresh long positions. Conversely, a break below $3,960 would likely shift control to sellers in the near term.

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.