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Gold Prices Experience Fluctuations Amid Economic Concerns

On Thursday, gold prices saw a rebound after a significant drop the previous day, as market participants remained vigilant on the evolving landscape of tariffs and the broader economic context.

The precious metal had recently peaked at close to $3,500 per ounce earlier in the week, driven by heightened investor anxiety over escalating trade tensions, particularly between the United States and China. These concerns were exacerbated by President Trump’s vocal criticisms of Federal Reserve Chair Jerome Powell. However, gold prices began to retract after Trump indicated a potential easing of tariffs on China and reassured that he had no plans to remove Powell from his position.

Since the beginning of the year, gold has appreciated by an impressive 28%, primarily fueled by fears that tariffs could hinder economic growth and reignite inflation. This environment often prompts investors to seek refuge in gold, a traditional hedge against rising price levels. By late Thursday, gold was trading around $3,350.

Market Indicators Suggest Changes in Momentum

Gold’s price ascended to unprecedented highs early in the week but later exhibited a notable intraday reversal, forming what is characterized as a bearish shooting star candlestick pattern.

This recent decline coincided with a significant dip in the relative strength index (RSI), indicating that the market momentum may be shifting. Looking at the broader trend, gold has displayed a sharp upward trajectory since mid-December, mirroring a basic Elliot Wave structure with five distinct price movements, likely leading into a corrective phase.

Important Support Levels to Keep an Eye On

Should the market face further decline, gold’s price could initially test the $3,145 mark. This level aligns with the early-April swing high and corresponds with a 38.2% Fibonacci retracement calculated from last December’s low to this month’s peak.

The subsequent support level is situated at $2,955, which is just above the 61.8% Fibonacci retracement area. Investors may find buying opportunities in this zone, particularly as it coincides with significant price points from February and April.

Should buyers fail to maintain $2,955, it could lead to a drop towards the $2,790 support level. This area, positioned above the 78.6% Fibonacci level, may attract buyers given its historical significance related to the notable swing high observed in October 2024.

Critical Resistance Area to Watch

In the event of price recovery, market participants will likely monitor the $3,500 region closely. Traders who have capitalized on recent price dips might consider utilizing this previous record high as an opportunity to secure profits.

The opinions and analyses presented in this article are for informational purposes only and are not to be considered financial advice. Always conduct your own research and consult with a financial advisor.

As of the time this article was written, the author does not hold any securities mentioned.

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