Gold Sees Sharp Pullback Amid Profit-Taking and Weakening Sentiment

Gold prices fell more than 2% on Monday, as traders took profits following last week’s nearly 6% rally, the biggest weekly gain in almost two years.

Weaker sentiment, fueled by easing safe-haven demand, was also a factor. The nomination of Scot Bessent as the next U.S. Treasury Secretary has raised expectations of a less hawkish stance, which could positively influence the Trump administration’s plans to impose tariffs on imports, potentially avoiding a trade war. China is the primary target, but the Eurozone is also likely to be affected.

Technical Outlook
The technical picture suggests that the recovery rally from the recent low at $2536 (on November 14) may be over. The 14-day momentum remains in negative territory and has turned downward, while the stochastic oscillator is reversing from overbought conditions.

New weakness has broken through significant support levels at $2650/48 (38.2% Fibonacci retracement of $2536/$2721, supported by the 55-day moving average and the top of the rising daily Ichimoku cloud). A daily close below these levels would confirm a negative signal, with next targets at $2629 (50% retracement) and $2621 (10-day moving average), protecting the $2607/$2600 zone (61.8% Fibonacci retracement and psychological support).

The daily cloud top and broken Fibonacci levels now act as initial resistance, with further resistance at $2648/50 and the daily Kijun-sen at $2663, which should limit any upside and keep the bearish outlook intact.