As the XAU/USD chart indicates, today, shortly after the start of the trading week, gold fell below $4,150 (the low of the year). The last time prices were at this level was in early December 2025, before the rally towards the all-time high.
Why Is Gold Declining?
Gold prices are being pressured by a combination of factors, including:
- → expectations that the Federal Reserve will keep interest rates higher for longer;
- → rising inflation risks driven by elevated oil prices.
In such conditions, market participants may shift capital into bonds, which appear more attractive than gold, as the metal does not generate yield.
Technical Analysis of XAU/USD
On the morning of 16 March, while analysing gold’s price movements, we identified a sequence of lower highs and lower lows (A–B–C–D–E). In addition:
- → key technical support levels were broken;
- → the outline of a descending channel was established;
- → we suggested that if bears maintained control, the price could move towards the lower boundary of the channel.
As the XAU/USD chart shows, by 18 March a renewed bearish impulse had emerged. Price not only declined towards the lower boundary (as marked by the arrow) but also broke below it, providing grounds to expand the descending channel. However, the lower boundary of the extended channel has so far held against selling pressure.
The current situation appears highly stressed:
- → from the March high, gold has lost around 25%;
- → media reports point to the worst week since 1983;
- → virtually any oscillator indicates strong oversold conditions;
- → the ATR indicator has surged to extremely high levels, which may signal cascading liquidations of long positions.
In this environment, traders should take into account the heightened volatility in gold prices in order to manage risk more effectively. A slowdown in the decline cannot be ruled out, supported by:
- → the proximity of the psychological $4,000 level;
- → an elevated geopolitical backdrop, primarily driven by the ongoing conflict in the Middle East.
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. The last time prices were at this level was in early December 2025, before the rally towards the all-time high.){kind=link}