A significant retreat in gold prices from its recent record peak signals a potential weakening in bullish momentum.

Despite a significant retreat from its recent peak of $2431 in late Friday trading, gold maintains its strength early on Monday.

The ongoing geopolitical tensions and concerns about escalating conflicts in the Middle East are sustaining the demand for safe-haven assets like gold. Central banks are actively buying, and the possibility of Federal Reserve rate cuts in the upcoming months is further bolstering the bullish sentiment.

However, Friday’s pronounced rejection from the highs, resulting in a bearish daily candle with a long upper shadow, suggests a potential bull-trap scenario. This signals a need for caution among bullish investors, indicating a possible pause for consolidation or a shallow correction due to overbought conditions.

Key support levels at $2329 (the rising 10-day moving average) and the psychological level of $2300 are expected to limit downward movement, facilitating another upward push. Breaking through the $2431 level would open up targets at $2453 and $2500.

Traders are advised to be cautious of dips below the $2300 mark, as this could lead to a test of lower support around $2260 (corresponding to the Fibonacci 38.2% retracement level of the upleg from $1984 to $2431), reinforced by the rising 20-day moving average.

Res: 2372; 2400; 2431; 2453

Sup: 2329; 2300; 2260; 2224