Short answer: this looks far more like a technical reset than a structural trend reversal.
Why the pullback is technically healthy
Overbought conditions were extreme. Gold had rallied almost vertically into the $4,640 area, pushing momentum indicators well beyond historical comfort zones. A $40–$60 shakeout is typical after such moves.
Positioning was crowded. CTA and momentum funds were heavily long. Strong U.S. PPI and retail sales provided a convenient macro trigger for profit-taking rather than a fundamental break.
No key support was violated. As long as spot holds the $4,500–4,520 zone, the medium-term uptrend remains intact.
Why fundamentals still favour gold
Geopolitical risk remains unresolved, supporting a persistent risk premium rather than a one-off spike.
Central bank demand continues to be price-insensitive, offering a structural floor beneath dips.
Real rates are constrained. Even in a “higher for longer” scenario, debt sustainability limits how restrictive policy can become in real terms.
What would signal a true trend reversal?
That would require more than strong data prints. Specifically:
A decisive break below $4,450 with follow-through selling.
A sustained rise in real yields, not just nominal rates.
Clear evidence that geopolitical risks are easing materially.
None of these conditions are currently met.
Bottom line
This move resembles a pressure-release correction after a parabolic run, not a change in regime. Volatility will remain elevated, but unless macro conditions shift decisively in favour of rising real yields, dips are more likely to be retested buying opportunities rather than the start of a prolonged downtrend.
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