Peter Smith
⬤ Gold has pulled back sharply after an extended rally, with XAU/USD dropping over 5% from recent peaks before finding support. The earlier surge was driven by economic uncertainty, geopolitical tensions, and a weakening US dollar. Now, after this strong run-up, the market has shifted into a corrective phase as traders lock in profits from the rally.
⬤ Current price action shows gold consolidating between roughly $5,098 and $5,000 per ounce. This range has controlled recent trading, with repeated bounces near both boundaries. A key short-term level sits around $5,055, acting as an intraday pivot point. A confirmed 15-minute close below this mark would signal downtrend continuation, potentially pushing prices toward $5,015 and then $4,965, where buyer demand is expected to emerge.
⬤ On the upside, recovery attempts keep getting rejected below former support zones that have now flipped to resistance. Gold would need a sustained push above $5,098 to shift short-term momentum. If that happens, the next targets appear at $5,163, with potential extension to $5,243 if bullish energy builds. These levels match prior reaction zones, reinforcing their technical significance during this consolidation period.
⬤ Despite chances for short-term bounces, the broader picture remains bearish—gold prices are still down roughly 11% from their peak. This consolidation phase matters for market sentiment, as it will determine whether the pullback stays corrective or deepens into something more serious. A sustained break below $4,965 would signal the correction is extending and could stretch into next month, marking a significant shift in XAU/USD's trend after one of its strongest rallies in years.
Peter Smith
