Gold broke yet another support level ($4K) and hit the lowest level in a year at $3,875. It’s down -31% from 52-week high of $5,626 in January.
Source: altFINS Expert Trade Setups
This expert trade setup was highlighted in our VIP telegram group.
What’s driving this poor performance?
You would think that with two major war conflicts, inflation and oil prices rising, political uncertainty, rising sovereign debt (France, US, etc.), AI risks (cyber attacks, unemployment) and AI trade unwide (bubble?), gold price should be rising?!
Isn’t gold supposed to be a hedge against global uncertainty and monetary debasement?
Maybe in the long term.
But short-term, Gold prices are driven lower by:
- Tech Earnings Squeeze: Deep equity slides (led by Big Tech/AI) triggered widespread margin calls, forcing institutions to liquidate gold for immediate cash.
- Inflation & Rate Hawkishness: Crude oil spiked above $117/bbl on Middle East supply fears, dampening Fed rate-cut expectations and pushing yields higher.
- Flight to Cash: Investors are favoring US Dollar cash buffers and Treasuries over non-yielding gold despite rising geopolitical risks.
What’s next for gold?
Near-term, it appears very oversold (RSI < 30) and the $4K is a robust support level where price found support a couple of times in the last 12 months. Price could dip below it briefly but it’s most likely to find support and bounce up over the next 30-90 days.
We’ve prepared a 4 year study on how Gold performs after it hit oversold levels in the past 4 years. Does it trade up in the next 7, 30, 90 days? What’s the typical drawdown (% decline)? Available to members only.
We first shared the gold analysis in our VIP telegram group and our Technical Analysis section.
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