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Gold prices continued their downward trend for the third consecutive day, pressured by the Federal Reserve's hawkish stance. The metal failed to recover above key Fibonacci resistance at $4,354, following a brief rebound from the $4,023 support level—the lowest since 2026. Technical analysis indicates bears are targeting critical support zones, with the $4,000 level under renewed threat. The Fed's aggressive monetary policy and rising bond yields are amplifying selling pressure, as investors shift toward higher-yielding assets. Market participants are closely monitoring whether gold can stabilize near $4,000 or if further declines toward $3,900 will materialize.
For traders, the breakdown below $4,354 could trigger a wave of stop-loss orders and accelerate the bearish momentum. The 38.2% Fibonacci retracement level has proven to be a significant psychological barrier, and a sustained move below $4,000 would signal a deeper correction. Central bank policies and inflation data will remain pivotal in determining gold's near-term direction. Investors should also watch for potential short-covering rallies but remain cautious about the overall bearish bias.
The decline in gold could impact Gulf investors with exposure to precious metals or hedging strategies against currency volatility. With the Fed signaling higher-for-longer rates, the opportunity cost of holding non-yielding assets like gold increases. Key levels to monitor include $3,900, $3,800, and the 200-day moving average. Technical indicators suggest a high probability of further downside unless there's a surprise policy pivot by the Fed.
