- Gold posted a bearish engulfing pattern on the weekly chart after falling 3.7% last week
- Prices are now lower for a third consecutive month, with bearish momentum remaining since March’s 11.5% collapse
- Key $4,500 support held earlier today, though the broader technical picture remains fragile
prices were trying to stabilise at the start of the week after Friday’s heavy sell-off. But the metal still looked vulnerable following last week’s sharp 3.7% decline, which reinforced the broader trend of lower highs and fading bullish momentum that has been building in recent months. Rising oil and bond yields remain the number one obstacle for gold.
The move lower initially continued during Asian trade earlier today, with gold briefly breaking the key $4,500 support area. Buyers did emerge around that level and prices have since bounced modestly, though so far, the rebound looks more like short covering than genuine conviction buying.
Gold Weighed Down by Yields
From a macro perspective, the bullion market is caught between two competing narratives. On one side, elevated bond yields continue to pressure non-yielding assets like gold and silver. On the other hand, geopolitical tensions in the Middle East remain high enough to prevent a complete collapse in safe-haven demand. So far, the former narrative seems to be providing the bigger influence for gold and other risk assets.
Overnight headlines did little to calm nerves. US President Donald Trump warned that “the clock is ticking” for Iran, although he stopped short of giving any firm deadline. Meanwhile, reports suggested that Pakistan shared a revised Iranian proposal on Sunday night aimed at ending the conflict with the US. Markets appear cautiously hopeful that diplomacy may still eventually prevail, though traders are clearly reluctant to price out escalation risks for now. Indeed, was trading around $110 per barrel at the time of writing.
For now, yields remain the bigger driver. Last week’s surge in global bond yields triggered liquidation across metals markets, particularly after investors fully abandoned expectations for near-term Federal Reserve . Sticky US data and rising oil prices have only reinforced concerns that interest rates may stay higher for longer.
Gold Technical Analysis Points Lower
Technically, the picture remains difficult.
While the bounce from $4,500 is encouraging for the bulls in the very near term, the market still sits below several broken support levels, which could turn into resistance moving forward. Among them are $4,586, followed by $4,638 and then $4,660. That $4,660 level is now the most important resistance level to watch and, unless reclaimed, any short-term rallies may continue to attract sellers.
Should gold go back below $4,500 support more convincingly this time, then there is relatively little meaningful support until the $4,400 region. A break beneath there would expose the 200-day moving average near $4,342, with the March lows just below $4,100 becoming the next downside target.
The trend is turning bearish on gold. March’s brutal 11.5% decline was followed by a smaller 1% drop in April, and unless sentiment improves sharply from here, May is on course to mark a third consecutive monthly decline. That sequence alone tells you the market is struggling to regain upside traction.
At this stage, gold does not yet look oversold enough to confidently look for a bottom. Much will depend on whether yields continue rising and whether this week’s geopolitical developments generate another flight to safety bid. Until then, the path of least resistance still appears tilted to the downside.
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Disclaimer:This article is written for informational purposes only; it does not constitute a solicitation, offer, advice, counsel or recommendation to invest as such it is not intended to incentivize the purchase of assets in any way. I would like to remind you that any type of asset, is evaluated from multiple perspectives and is highly risky and therefore, any investment decision and the associated risk remains with the investor.