Gold Price Prediction Weekly: Rebound Underway As XAU Pullback Meets Key Support
Gold has cooled off after hitting fresh all-time highs, but preliminary indications indicate the correction may already be reaching a floor.
Quick overview
- Gold prices have retreated from all-time highs, dropping nearly $180 last week amid improved global sentiment following a US-China trade agreement.
- Despite the pullback, technical indicators suggest that the broader uptrend for gold remains intact, with key support levels holding firm.
- Recent developments, including a downgrade of the US credit rating and increased demand in China's gold market, have provided a fresh boost to gold prices.
- Analysts remain bullish on gold's long-term outlook, anticipating that declining real interest rates will support a resurgence in prices.
Gold has cooled off after hitting fresh all-time highs, but preliminary indications indicate the correction may already be reaching a floor.
Risk Appetite Returns, and Gold Retreats
As global sentiment improves on the heels of the latest US-China trade agreement, gold prices have begun to pull back from their historic highs. April saw spot gold (XAU/USD) hit an unprecedented $3,500 per ounce. But with risk appetite returning to markets, gold shed nearly $180 last week, briefly dipping to $3,120 before closing around $3,200—its sharpest weekly drop since November.
This pullback mirrored broader market behavior, with investors rotating away from traditional safe havens like gold and government bonds in favor of equities and riskier assets. The formal announcement of a new trade pact—led by former President Trump—eased fears of escalating global tensions and reduced demand for protectionist plays like gold.
Technical Support Holds Firm – Gold Chart Daily
Stochastic is reversing higher from overbought levels
Despite the retracement, price action suggests the broader uptrend remains intact. The 50-day Simple Moving Average (SMA), marked in yellow on technical charts, has once again proven a dependable line of defense. While briefly pierced on a few occasions, there was no daily close beneath it, reaffirming its role as dynamic support.
Friday’s bounce off this level coincided with fresh inflation signals in the US. A sharp uptick in consumer inflation expectations to 7.3%, combined with higher import costs, lifted the US dollar—but gold’s reaction was muted, and sellers were met with renewed buying interest.
Moody’s Downgrade and Tariff Fears Lift Gold Again
Over the weekend, markets opened with a bullish gap. Spot gold jumped to $3,219 after Moody’s unexpectedly downgraded the US credit rating late Friday. Adding fuel to the move was a new round of tariff announcements from Treasury Secretary Bessent, targeting multiple nations on what’s now dubbed “Liberation Day.” The resulting weakness in the US dollar gave gold a fresh boost.
At the same time, China’s domestic gold market is seeing elevated investor demand, with Chinese gold ETFs posting record inflows in April. These developments reinforce the view that the recent dip may be more of a technical breather than a fundamental shift in trend.
Bigger Picture Still Bullish
In the broader context, gold’s long-term trend remains positive. Analysts anticipate real interest rates will decline further as the Federal Reserve moves toward easing. Historically, such conditions have led to a resurgence in gold prices following dips—particularly when those corrections are driven by sentiment rather than fundamentals.
With the 50-day SMA acting as a technical springboard, and signs of stabilization emerging in recent sessions, many investors are interpreting the latest retracement as a potential reentry point. The combination of geopolitical unease, policy uncertainty, and resilient global demand continues to provide fertile ground for further upside in gold.
Conclusion:
While gold’s record-setting rally has paused amid improved risk sentiment, the price action suggests this may be a classic correction within a larger bullish cycle. As long as key support levels hold, the path of least resistance for XAU/USD may still be higher.
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