Gold Cools Off After a Record Rally

XAUUSD slid down from its $3500 ATH, right after touching this even number. Possibly, Institutional market participants used the level to take their profits, and now traders are pursuing a technical correction. This morning, the selling pressure was so strong that a gap appeared, which is very unusual for Forex.

We warned you, that no growth is vertical, and advised you to use a Stop-Loss when entering by "buy market”. The long-awaited fall found its roots in US Treasury Secretary Scott Bessent’s words, that a US-China de-escalation might be on the horizon. Furthermore, Trump seemed to back down from his plans to fire the Fed Chair, which not only gave equity markets some bullish relief but also triggered a prolonged profit-taking in gold.

Now, as you can see on the chart, the key levels to monitor are $3231/oz and $3168/oz, where the Fibonacci Golden Zone lies. You might find this strategy boring or simplistic, but the Zone works at its best when gauging the dynamics of the precious metal. A vertical rally needs constant bullish news to stoke the market’s appetite for more. A lack of positive news or a simple negative one always triggers the sell-off.

XAUUSD has reached our targets for the year, so we are not in a hurry to find more. As long as the price reaches our correction target, everything will depend on the news after that. If trade escalation and global tensions persist, fueled by Trump-driven uncertainty, the precious metal will find its way upwards.

If not, the correction after a record quarter might resume.

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