- Gold’s shine dimmed as forced selling swept through the markets.
- Holding above $3,000 is key—but the pressure’s mounting.
- With volatility surging, gold’s next move could define the week.
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Gold fell sharply at the Asian open overnight, along with everything else, before quickly bouncing back to turn momentarily positive, and then drifting back lower into the red where it was holding at the time of writing. It remains to be seen whether the metal will now resume higher or gets dragged lower along with risk assets, which suffered a massive setback last week after Trump introduced his reciprocal tariffs.
It was such a poor week for risk assets to start the second quarter last week, and volatility is set to stay elevated amid concerns about the economic impact of tariffs. Gold had actually stormed into Q2 with a bang, setting fresh all-time highs after a stellar first quarter where it rallied an impressive 19%. But just as quickly, the rally stalled. Last week saw gold retreat sharply alongside a broad pullback in risk assets. Still, the yellow metal’s 1.5% weekly drop was relatively mild compared to silver’s 13% plunge or the Nasdaq 100’s 10% slide — but it marked a shift in sentiment. Near-term, the gold direction has turned more cautious, as the metal finally gave back some ground.
Could Gold Go Back Below $3,000?
As we move into the new week, sentiment remains fragile. With the trade war narrative heating up again, many traders are sitting on the side-lines, reluctant to commit capital until there’s more clarity. Safe haven gold has still outperformed, but when stocks fall so sharply, traders are forced to liquidate everything to free up margin. And that is precisely why gold also fell in the last two days of last week, before extending that slide today.
It is all about what gold does around the $3K mark now. After a dip to $2971 overnight, gold has quickly climbed back above $3,000+ to rise to a session high so far of $3055. But the metal has been unable to rise back above resistance at $3055-3058 area, suggesting that the kick-back rally has faded.
But will gold go back decisively below $3,000 later today or in the week.
Well, plenty of traders had set their sights on the $3,000 level — but gold blew past it last week, touching nearly $3,170. With such a powerful move, some profit-taking was always on the cards.
As I mentioned previously, it wasn’t gold’s fundamentals that pulled it down — it was the stock market slump. If equities remain under pressure this week, we could see further selling in gold as investors raise cash to cover losses elsewhere. This kind of forced liquidation has already started, and it’s a theme worth monitoring.
Fundamentals still lean supportive in the bigger picture, but there are risks. Any thaw in geopolitical tensions — such as Trump’s promises to resolve the Ukraine or Gaza crises — could reduce gold’s safe-haven appeal. But at this point, there’s little evidence of a breakthrough.
There’s also the question of supply. High prices might incentivize mining companies to boost production, although supply growth tends to lag. Central bank buying could also slow at these lofty levels.
Gold Technical Analysis and Trade Ideas
From a technical standpoint, gold has been flashing overbought signals across multiple timeframes — especially on the longer-term charts. That opens the door for continued short-term selling pressure, keeping the near-term gold trend on the bearish side.
Last week’s drop hasn’t broken the broader uptrend yet — we’re still seeing higher highs and higher lows. But that could change quickly if key support levels don’t hold.
Here are the major zones to watch on the downside:
- $3,000 – A psychological level and key support. A decisive break below here (daily closing basis) could trigger a deeper correction.
- $2,930–$2,956 – The previous breakout zone. A strong support area that could attract some dip-buying or short-side profit-taking.
- $2,790 – October’s high and where the long-term uptrend line intersects. A crucial level for bulls.
- $2680 – marking the log-term 200-day moving average.
Resistance remains at the $3,055–$3,060 area, with a break above potentially opening the door to $3,100 and beyond.
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Disclaimer: This article is written for informational purposes only; it does not constitute a solicitation, offer, advice, counsel or recommendation to invest as such it is not intended to incentivize the purchase of assets in any way. I would like to remind you that any type of asset, is evaluated from multiple perspectives and is highly risky and therefore, any investment decision and the associated risk remains with the investor.