GOLD Analysis
Afternoon: Gold Prices Stabilize After Sharp Sell-Off
Highlights:
- Gold dropped over 1% to its lowest level in 3+ weeks before stabilizing near $3,030/oz, as investors took profits and sought liquidity amid broader market declines.
- Federal Reserve Chairman Powell's warning about inflation and slowing growth due to tariffs added to investor concerns and contributed to the decline in gold prices.
- Goldman Sachs cut its 2026 Brent and WTI oil forecasts to $58 and $55, citing rising recession risks and the likelihood of increased OPEC+ output.
Overview:
Gold prices found some footing near the $3,030 per ounce mark on Monday after experiencing a steep decline of over 1% earlier in the day, hitting their lowest level in more than three weeks. This sudden drop appears to be a result of profit-taking activity by investors who may be liquidating gold positions to raise cash in response to broader market sell-offs.
Heightened volatility in global financial markets has increased demand for liquidity, pushing some investors to exit safe-haven assets like gold, at least temporarily, to offset losses in other asset classes. Despite gold's recent price weakness, the broader macroeconomic backdrop remains supportive for the precious metal in the medium to long term.
Fears of a global trade war have intensified, especially after recent tariff announcements, with potential economic consequences that include a slowdown in growth and increased inflation. These risks were underscored by Federal Reserve Chairman Jerome Powell, who warned that ongoing tariff tensions could hurt the U.S. economy by elevating consumer prices and slowing business activity. His remarks added to existing market unease and spurred further selling in risk assets, contributing to gold’s decline.
Technically, gold’s correction could be a healthy retracement within a broader bullish trend, especially considering its strong performance year-to-date. The price action is likely to remain volatile as markets digest both macroeconomic data and geopolitical developments, particularly related to trade policy and central bank actions.
Trade Action:
Selling Gold from 3030-35 range for targeting 2988 extended to 2940 which invalidates above 3055.
Support & Resistance Levels:
