on Friday it was at $4,800 per troy ounce. It remains in a vulnerable position after falling 3.8% the previous day and is heading towards its second consecutive weekly decline. This comes amid high selling pressure.
The correction follows a series of upgrades to all-time highs in January. The price rise was initially driven by increased geopolitical risks, concerns about the independence of the Federal Reserve and speculative demand from China. Since then, tension has eased, while the area's protective appeal has diminished. Representatives of Iran and the United States confirmed that negotiations are taking place in Oman and that the market is closely monitoring their progress.
An additional factor was weak data on the US labor market. In January, the number of layoffs rose to 108.4 thousand, the highest for this month since 2009. Initial jobless claims rose to 231 thousand, and ADP's report on private sector employment was weaker than expected. A series of these data have raised expectations of a Fed rate cut later this year. At the same time, the market still sees June as a possible time to make the first move.
Technical analysis
The H4 chart shows a full pulse growth with a peak above 5500, followed by an aggressive correction. The fall occurred in the 4450-4500 area. From there the rebound began. The price rose to the 5000-5050 area, but remains below the key resistance of 5100-5150 and the Bollinger midline. The structure indicates a phase of high volatility and redistribution after an overheated uptrend.
After a sharp collapse, gold on the H1 chart formed a local bottom in the 4650-4700 range and began to recover. The price has returned to within the Bollinger Bands and is consolidating near the midline, around 4820-4850. The move appears corrective, volatility is decreasing and the balance of power remains neutral.
Conclusion
In short, gold's decline reflects a market reassessment, where easing geopolitical fears and a shift toward anticipating Fed easing have removed key pillars of its recent speculative rally. Technically, the sell-off appears to be a volatile but natural correction following an overheated uptrend. While short-term stabilization is occurring, the price remains vulnerable below critical resistance on a higher time frame. The near-term direction will likely depend on the tone of upcoming US economic data, which will reinforce or undermine dovish market expectations from the Federal Reserve, and future developments in Middle East diplomacy.
By RoboForex Analysis Department
Disclaimer
Any forecast contained herein is based on the author's personal opinion. This analysis cannot be considered trading advice. RoboForex assumes no responsibility for trading results based on the trading recommendations and reviews contained herein.
