What triggered Gold price's latest price pullback

Traders Union
All News
Financial News
Gold slides 5.15% today to $4,040.89

Highlights

Central banks such as China, India, and Turkey increased gold reserves, supporting robust official sector demand.
Gold's gains are constrained by persistent high US Treasury yields, a strong dollar, and tight Fed policy expectations.
Gold trades well below key moving averages with bearish momentum; expected five-day range is $3,885.62 to $4,273.80, with 75% probability of further declines.

Official sector buying contrasts with Fed-driven investor caution

Central banks, including China, India, and Turkey, were reported to have increased their gold reserves, underscoring active official sector demand. Persistent high US Treasury yields and a firmer US dollar have accompanied a reduction in gold's upside momentum. The market's sensitivity to US Federal Reserve policy, especially expectations of sustained or higher interest rates, has limited gold's performance. Physical gold investment and central bank purchases remained steady though price action has remained under broader selling pressure.

Anton Kharitonov, expert at Traders Union, sees gold trapped in a pronounced downtrend below all major moving averages. The selloff is strong, with momentum indicators like the MACD and ADX confirming heavy downside pressure. He notes that central bank buying is not enough to counter the drag from rising yields and a firm dollar. The asset’s oversold signals have yet to attract meaningful buyers, leaving gold exposed to deeper losses if $3,885.62 breaks. "Unless broader macro conditions ease or sentiment shifts, gold risks further downside despite persistent official sector demand," Kharitonov cautions.

Viktoras Karapetjanc, expert at Traders Union, highlights resilient central bank demand as a constructive force for gold. He believes the sustained accumulation by countries like China and India supports the long-term bullish structure. Despite current headwinds from higher rates and a strong dollar, he sees these as temporary hurdles. Karapetjanc points out that official inflows should provide a platform for future upside once macro conditions stabilize. "I remain confident that strong institutional demand will eventually drive gold higher, offering attractive setups for proactive investors," he states.

Parshwa Turakhiya, analyst, notes that gold is deeply oversold after a sharp 5.15% drop today. He sees a scenario where intraday volatility opens room for tactical trades as indicators like RSI and CCI signal stretched bearish sentiment. Turakhiya suggests that, while sellers are in control, wide support and resistance bands offer defined risk points for short-term setups. "With gold trapped between $3,885.62 and $4,273.80, nimble traders can exploit fast swings while managing downside risk," he remarks.

Resistance at Kijun line as momentum and oscillators confirm selling

XAU/USD trades well below all major moving averages, with the current price near $4,040.89 versus the 20-day ($4,471.04), 50-day ($4,599.12), and 200-day ($4,636.81) simple moving averages. This alignment indicates clear selling pressure across the short, medium, and long-term trend measures. The nearest dynamic resistance is the Ichimoku Kijun line at $4,498.68, which acts as a key cap for any rebound attempt. Momentum remains negative according to the Moving Average Convergence Divergence (MACD) and the Average Directional Index (ADX), suggesting sellers are in control. The Relative Strength Index (RSI), Stochastic RSI, and Commodity Channel Index (CCI) are all deep in oversold territory, indicating that price is stretched but showing little sign of a reversal. Bull/Bear Power (BBP) is strongly negative at -51.40, confirming that sellers dominate intraday momentum and further supporting the oversold scenario. The Awesome Oscillator trend also favors ongoing downside pressure. The pair opened with a downside gap of approximately $75.63 and has dropped 5.15% today, currently trading near the bottom of its daily range. Intraday volatility stands at 3.82%, and the tone remains heavy with persistent pressure after the open. All major momentum signals are confirming the intraday move.

Earlier, analysts noted that gold remained under pressure from persistent bearish momentum amid waning safe-haven demand. The latest technical breakdown and deepening oversold signals reinforce this bearish outlook, highlighting $3,885.62 as a critical support level to monitor for potential downside risk in the coming sessions.

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

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.