Gold – sharp two-day retreat breaks $5,000 support, but broader bullish trend intact
Gold briefly slipped below the key $5,000 support on Friday, extending a dramatic two-day drop of over $600.
As noted in yesterday’s commentary, the risk of a pullback had risen after the yellow metal posted nine consecutive days of gains and accelerated sharply following the breakout above $5,000.
The initial retreat from $5,600 to $5,500 appeared to be a normal price adjustment, similar to previous minor corrections. However, news suggesting that the new Federal Reserve Chair’s monetary policy stance could be more hawkish than expected triggered a strong sell-off. Some market chatter on social media also hinted that intervention might be influencing the move, which cannot be entirely dismissed.
Thursday’s long-legged Doji candle, forming after the sharp fall found support at $5,100 and bounced, indicated strong indecision, leaving the door open for both bullish and bearish outcomes. Friday’s renewed acceleration to the downside, however, confirmed that the correction from the record high was continuing.
Friday’s breach of the key psychological $5,000 level, with dips finding support at the next major level around $4,936 (50% retracement of the $4,274–$5,598 uptrend, reinforced by the daily Kijun-sen), added to the negative outlook.
Additional pressure on the gold price may arise from it being the final day of both the week and the month, coupled with calmer developments in the Middle East, suggesting that the U.S. may lean toward talks with Iran rather than military action.
From a technical perspective, the daily chart shows a sharp loss of upward momentum, with the RSI exiting overbought territory, though moving averages remain in bullish alignment, partially mitigating the negative impact.
Gold remains on track for a significant monthly gain, but the formation of a reversal pattern on the daily chart, together with a Gravestone Doji on the weekly chart—a bearish reversal candlestick—leaves the downside exposed.
A weekly and monthly close above $5,000 would support the scenario of a healthy correction within the larger uptrend, providing bulls the chance to regain control.
Res: 5100; 5157; 5200; 5286
Sup: 5000; 4936; 4900; 4780
