Gold Price Predictions for the Coming Days: Between Technical Correction and Recovery Hopes

Gold prices (XAUUSD) have experienced dramatic movements in recent weeks, reflecting the conflict between short-term technical factors and deeper structural fundamentals. The precious metal has recently fallen sharply, reaching levels not seen in weeks, raising questions about the future outlook for gold prices and the expected scenarios for the current phase. Understanding the drivers behind these rapid movements is essential for investors seeking to make informed investment decisions during this sensitive period.

Overcrowded Positions and Forced Liquidation: Why Did Gold Drop So Quickly?

Gold entered its recent correction phase carrying the burden of large investment positions from buyers, especially after the strong rally in January. This heavy accumulation of long positions made the market highly sensitive to any negative signals, even if they are relatively minor in size.

In such an environment, small price movements turn into widespread sell-offs that trigger accumulated stop-loss orders. Additionally, trend-following funds (CTAs) and volatility-targeting funds, which rely on momentum and price rather than fundamental indicators, tend to amplify downward moves automatically. This coincided with a noticeable increase in margin requirements for CME gold futures, where margin rates rose from 6% to 8%, significantly increasing the cost of maintaining open positions.

This measure forced many traders, especially highly leveraged speculators, to inject additional liquidity or quickly liquidate parts of their holdings to avoid margin calls. This rapid selling flow intensified the decline and showed that the market’s main driver during this period was not a fundamental economic reassessment but a purely technical liquidity shock aimed at liquidating highly leveraged positions.

Deep Technical Analysis: Critical Support and Resistance Levels

From a technical perspective, gold entered a critical phase after breaking key upward trendlines that had supported it since early January. The failure to hold above $5,250 triggered a rapid decline toward lower levels. The $5,185 level, previously a strong support, turned into a zone of struggle before the recent collapse, reflecting weakened buying pressure and increased selling pressure.

Regarding momentum indicators, the MACD shows a radical shift in momentum structure. The MACD line crossed below the signal line at zero, with long red bars appearing and increasing on the histogram, clearly indicating dominance by sellers. The widening gap between the MACD line and zero suggests intensifying bearish momentum, increasing the likelihood of continued pressure until the market reaches stronger support zones.

Meanwhile, the Relative Strength Index (RSI) has sharply fallen from overbought levels (above 80) to below 30, traditionally indicating an oversold condition and a potential bottoming process. This steep decline confirms the exhaustion of buying momentum and suggests the market is now in a “search for a new price base” phase.

Key technical levels to watch closely in the coming period:

Resistance levels: 4,750 USD (near-term resistance), 4,950 USD (medium-term resistance), 5,100 USD (long-term resistance)

Support levels: 4,400 USD (first support), 4,200 USD (second support), 4,000 USD (strategic support)

Liquidity Pressures and Reassessment of Interest Rate Expectations

The selling wave was not limited to the gold market alone but extended to equities, cryptocurrencies, and other commodities. This widespread pressure indicates we are facing a “general liquidity shock” rather than an isolated move in one market. The phenomenon originated from sequential margin calls across commodity markets, forcing investors to sell “what can be sold” from highly liquid assets.

Simultaneously, investors are reassessing their overall expectations for the US monetary policy path. It has become clearer that the appointment of Kevin Worch as Federal Reserve Chair does not necessarily imply a “dovish” (easy) monetary policy as previously priced in by markets. Worch is known for rejecting the expansion of the Fed’s balance sheet and focusing heavily on inflation risks, which supports a scenario of prolonged monetary tightening.

While expectations of rate cuts remain (at least two cuts expected in 2026), the lack of a clear commitment to rapid easing has diminished the positive momentum previously driven by early easing bets. This shift in outlook has added downward pressure on gold, which typically benefits from accommodative monetary environments and quick rate cuts.

Upcoming Economic Events and Their Impact on Gold Price Expectations

Despite current volatility, several key economic indicators on the horizon could significantly influence gold’s direction in the coming days and weeks:

European Retail Sales Data: The Eurozone releases retail sales figures reflecting consumer spending in Europe’s largest economy. Weak readings could heighten fears of economic slowdown, prompting investors to seek safe havens like gold.

Eurozone Consumer Price Index (CPI): This is a key measure of inflation; higher readings could lead to expectations of European monetary tightening, supporting the euro and reducing gold’s attractiveness.

US ISM Manufacturing Data: This indicator reflects the health of the manufacturing sector and the US economy overall. Weaker-than-expected readings will likely reinforce recession fears and support gold.

Gold Price Outlook for the Coming Days: Scenarios and Strategies

Currently, gold is undergoing a severe correction aimed at “market cleansing” and filling price gaps accumulated during the previous rally. This process paves the way for establishing a more stable price base. In this environment, the best strategy is to wait and observe before entering new long positions.

The current price action suggests caution against early buying. The optimal plan is to wait until the price stabilizes above $4,750 or shows clear, reliable technical reversal signals (such as a “hammer” candle on the daily timeframe). In the very short term, the metal remains vulnerable to sharp fluctuations between support and resistance levels.

On the other hand, long-term gold price expectations remain cautiously positive. Trusted financial institutions like ANZ Bank have indicated that gold could surpass $5,000 per ounce by 2026, supported by ongoing safe-haven demand. The World Gold Council reports that continued economic uncertainty and geopolitical tensions bolster the hedging demand for the metal.

Many market analysts see the current correction as a gradual entry opportunity, provided that key technical support levels are maintained. There is also an expectation that the market may enter a consolidation phase before resuming an upward trend, especially if upcoming US inflation data show further declines or confirm expectations of future rate cuts.

Overall, the short-term outlook for gold prices suggests continued volatility and temporary corrections driven by short-term pressures. However, deeper structural factors—such as ongoing geopolitical tensions, sustained safe-haven demand, and central bank reserve accumulation—provide fundamental support for the metal in the medium and long term. Any additional decline could be viewed as a buying opportunity at key technical support levels, but investors should remain vigilant regarding monetary policy developments and critical economic data.