Gold retraces, facing headwinds as positive mood dampen its demand

[Redator]

Gold is facing headwinds as bulls failed to retest earlier All-time highs ($3,500) even as global markets went ablaze through the past week war-induced volatility.

Markets tend to react erratically in such periods and some movements are tough to understand as many participants trade their biases for different reasons – One thing to remember however is that a failure to achieve new highs or new lows despite many fundamental reasons to do so is a sign of weakness in the prevailing trend, leading to key reversal points.

One example of this for example was the 2022 bear market in Equities, that bottomed on Meta's court-case headlines, and despite fears of high interest rates having the potential to mess up the hot US Economy, Equities failed to break their lows and led to a consequential non-stop rebound, leading to the AI Boom.

The most recent highs for the Bullion were marked at $3,450, attained through some hesitant bullish impulses that were met by sharp reversal as war-fears abated. The Metal is now trading more than $200 lower, attaining levels last seen at the end of May.

Explore different levels of interest for Gold and why bulls will have to show up with renewed strength to avoid prices correcting further.

Read More: S&P 500 hits new all-time highs despite disappointing Core PCE report

Gold Multi-timeframe Technical Analysis

Gold Daily Chart

XAU/USD Daily Chart, June 27, 2025 – Source: TradingView

The precious metal has started a corrective sequence this week with consecutive, small scale corrective daily candles leading to stronger selling seen today.

Prices just broke below the 50-Day Moving Average and the 3,300 Key pivot mentioned in our past analysis, with the Daily RSI momentum going to the bearish territory.

The selling flows are currently stalling at the Daily upwards trendline that led to previous rebounds, however a failure to hold here will invalidate the potential Bull flag that was giving markets higher probabilities amid past weeks' cautious market sentiment.

Gold 4H Chart

XAU/USD 4H Chart, June 27, 2025 – Source: TradingView

The 4H RSI is currently trading in oversold territory, with markets showing an indecision doji as prices meet the Upwards trendline seen on the Daily timeframe.

One sign for bearish confirmation is the faster moving 20-Period MA crossing below the 200-4H Moving Average as markets trade below the 3,300 Pivot Zone – bears will for now have to maintain prices below the key pivot.

Bulls will be looking either to hold the current level for a break above the pivot, or else to buy a further retracement at the 3,200 Main Support that led to consequent rebounds in May.

The Support Zone also comes at a confluence with the high of the April descending Daily Channel that may now act as technical support.

Any break from there will then hint at a test of the $3,000 Monthly Support, though this level is still far.

Gold 1H Chart

XAU/USD 1H Chart, June 27, 2025 – Source: TradingView

Gold prices are progressing in an Hourly descending Channel with the most recent bearish acceleration meeting buyers at the previously mentioned trendline and immediate support 3,250.

Sellers brought the precious metal to a tight bear channel which will have to be broken out from for hopes of a rebound. In the meantime, 1H RSI showing oversold and not progressing further momentum indicates higher chances of consolidation.

Look at broader sentiment in Stock Indices for example and do not forget the upcoming 16:30 Bank Stress Test results that may create some demand if the results come in negative.


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