Gold prices, which have advanced in recent sessions, face the risk of a deeper pullback despite maintaining a bullish technical structure, analysts say.
The precious metal has extended gains this month, supported by safe-haven demand amid geopolitical tensions and expectations of Federal Reserve rate cuts later this year. However, technical indicators point to potential downside risks, with some traders warning of a sharper correction if key support levels are breached.
Analysts at major financial institutions note that while the medium-term trend remains upward, short-term momentum has started to wane. Resistance is seen around the $2,400 per ounce mark, a level that has capped recent rallies. A break above this could extend gains, but failure to hold above critical moving averages may trigger a pullback toward $2,300 or lower.
The U.S. dollar’s recent strength has also weighed on gold, as the two assets often move inversely. If the dollar continues to gain ground, it could further pressure gold prices in the near term. Traders are closely watching U.S. economic data releases, particularly inflation and employment figures, which could influence both the dollar and Federal Reserve policy expectations.
For now, the bullish structure remains intact, but the risk of a deeper correction is rising as technicals suggest exhaustion in the short-term rally.
