Gold rally stops after seven weeks, shooting star warns
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Gold Holds Gains But Faces Potential Trend Reversal
Gold’s impressive seven-week winning streak remains intact, but a sharp 2% drop on Friday, wiping out $60 in gains, has raised concerns about a potential shift in momentum. The price action formed a shooting star candlestick pattern, a technical indicator that often signals a reversal or at least a slowdown in the prevailing trend. Despite Friday’s pullback, gold’s longer-term fundamentals remain strong, supported by ongoing trade tensions, geopolitical uncertainty, and institutional demand. However, the immediate outlook depends on whether buyers return aggressively or profit-taking continues.
Tariff Uncertainty Keeps Traders on Edge
Gold traders are closely monitoring Trump’s next move on tariffs, as last week’s executive order stopped short of imposing specific trade barriers. While gold has historically been exempt from tariffs, the current uncertainty has fueled aggressive stockpiling in U.S. gold reserves, pushing Comex exchange holdings up by over 100% since November. London gold markets are now experiencing severe supply shortages, with wait times stretching from one to two months, signaling strong physical demand despite short-term price fluctuations.
China-U.S. Trade Tensions Add to Gold’s Safe-Haven Appeal
Beyond supply chain dynamics, gold continues to benefit from broader macroeconomic concerns, particularly rising trade tensions between China and the U.S.. The prospect of tariff escalations and global economic uncertainty is keeping gold firmly positioned as a safe-haven asset, even as some traders take profits.
Technical Outlook: Key Levels to Watch
Gold needs to reclaim $2,920 to resume its bullish trajectory, with the next upside target at $2,950. On the downside, if Friday’s pullback deepens, support sits near $2,850, followed by a critical trendline at $2,810. The Relative Strength Index (RSI) remains elevated but has cooled, suggesting the recent rally may need a consolidation phase before the next leg higher. The key test will be whether buyers step in near support levels or if further downside pressure emerges.
Outlook: Will the Rally Resume or Pause?
Gold’s fundamental drivers remain intact, but technical signals suggest caution in the short term. If the market digests Friday’s drop without breaking below $2,850, buyers could regain control and push gold back toward record highs. However, failure to hold key support levels could trigger deeper profit-taking before the next move higher.
Gold’s impressive seven-week winning streak remains intact, but a sharp 2% drop on Friday, wiping out $60 in gains, has raised concerns about a potential shift in momentum. The price action formed a shooting star candlestick pattern, a technical indicator that often signals a reversal or at least a slowdown in the prevailing trend. Despite Friday’s pullback, gold’s longer-term fundamentals remain strong, supported by ongoing trade tensions, geopolitical uncertainty, and institutional demand. However, the immediate outlook depends on whether buyers return aggressively or profit-taking continues.
Tariff Uncertainty Keeps Traders on Edge
Gold traders are closely monitoring Trump’s next move on tariffs, as last week’s executive order stopped short of imposing specific trade barriers. While gold has historically been exempt from tariffs, the current uncertainty has fueled aggressive stockpiling in U.S. gold reserves, pushing Comex exchange holdings up by over 100% since November. London gold markets are now experiencing severe supply shortages, with wait times stretching from one to two months, signaling strong physical demand despite short-term price fluctuations.
China-U.S. Trade Tensions Add to Gold’s Safe-Haven Appeal
Beyond supply chain dynamics, gold continues to benefit from broader macroeconomic concerns, particularly rising trade tensions between China and the U.S.. The prospect of tariff escalations and global economic uncertainty is keeping gold firmly positioned as a safe-haven asset, even as some traders take profits.
Technical Outlook: Key Levels to Watch
Gold needs to reclaim $2,920 to resume its bullish trajectory, with the next upside target at $2,950. On the downside, if Friday’s pullback deepens, support sits near $2,850, followed by a critical trendline at $2,810. The Relative Strength Index (RSI) remains elevated but has cooled, suggesting the recent rally may need a consolidation phase before the next leg higher. The key test will be whether buyers step in near support levels or if further downside pressure emerges.
Outlook: Will the Rally Resume or Pause?
Gold’s fundamental drivers remain intact, but technical signals suggest caution in the short term. If the market digests Friday’s drop without breaking below $2,850, buyers could regain control and push gold back toward record highs. However, failure to hold key support levels could trigger deeper profit-taking before the next move higher.