What's behind Gold's latest price pullback?

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Gold slides 1.87% today to $4053

Highlights

Gold prices remain volatile under pressure from rising US Treasury yields and expectations of further Fed rate hikes.
Central banks in China, India, and Turkey increased gold reserves by a record 1,136 tonnes in 2022, supporting long-term demand.
Gold trades below key moving averages, with technicals indicating bearish momentum and a five-day range forecast of $3,951 to $4,154.

Volatility rises as central bank demand offsets policy headwinds

Recent gold market activity has been shaped by increased volatility, with prices briefly advancing above $4,100 before pulling back amid higher US Treasury yields and rising expectations of further Federal Reserve interest rate hikes. Geopolitical tensions, particularly involving the US and Iran and higher oil prices, have contributed to inflation concerns and bolstered bond yields that challenge gold as a non-yielding asset. Central banks in emerging markets such as China, India, and Turkey were reported to have increased gold reserves in 2022 by a record 1,136 tonnes. Longer-term demand from sovereign institutions and ongoing global monetary policy changes were noted, though price action has remained under broader selling pressure.

Anton Kharitonov, expert at Traders Union, views the recent gold drop as technically and fundamentally fragile. He notes the price trading below all key moving averages signals persistent seller dominance. Despite increased central bank purchases in emerging markets, rising US Treasury yields and renewed Fed hawkishness outweigh supportive flows. Kharitonov warns of risks if XAU/USD breaches $4,046 support, with macro headwinds compounded by mixed intraday sentiment data. "With sellers firmly in control and sentiment indicators split, gold may be vulnerable to another leg down unless fundamentals shift quickly."

Viktoras Karapetjanc, expert at Traders Union, believes long-term gold fundamentals remain strong. He highlights historic central bank buying and robust demand from sovereigns as a structural support. Karapetjanc sees recent macro headwinds as temporary noise, expecting resilient inflation risks and global monetary shifts to reignite bullish momentum. "Current volatility opens opportunities — the bullish structure remains intact for investors looking at the bigger picture."

Jainam Mehta, market strategist, notes gold's technical bias leans bearish but signals are not uniform. Oscillator divergence suggests possible contrarian trade setups if resistance at $4,075 breaks. He sees a probable stabilization scenario, but advises tight stops given intraday volatility and mixed momentum cues. "A potential breakout above resistance may attract tactical bulls, but capital protection is key in this choppy environment."

Bearish momentum holds as mixed signals and resistance cap rally

XAU/USD trades below its 20-day ($4,075), 50-day ($4,199), and 200-day ($4,622) moving averages, indicating sellers remain in control across short-, medium-, and long-term trends. The Ichimoku Kijun at $4,075 establishes immediate resistance, with the nearest support found at today's low of $4,046. The longer-term outlook is bearish based on the alignment of the 50-day versus the 200-day moving averages. Momentum signals are mixed: MACD and ADX point to a selling bias, while oscillators are split, with the RSI at 51.36 (Buy) and CCI also flashing Buy, but Stochastic RSI and Bull/Bear Power show overbought conditions and dominance by buyers intraday. Price action remains near the lower end of today's range, with intraday volatility at 2.06%. The session tone reflects continued pressure after the open, and conflicting indicator signals suggest further choppy trading may be ahead.

Earlier, analysts noted that downside risks had overtaken gold’s safe-haven appeal due to persistent technical barriers and heightened geopolitical tensions. The current analysis reinforces this bearish outlook, with fresh pressure from rising Treasury yields and expectations of continued Fed tightening underscoring $4,046 as a pivotal support level that could trigger deeper losses if breached.

Source of Data: XAU Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

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