Spot gold closed sharply lower on Friday after touching an all-time intraday high, raising the prospect of a short-lived technical correction early next week.
Gold settled at $4253.97 per ounce, down $72.09 (1.67%) from the previous session. Prices had briefly climbed to $4380.99, but heavy late-session selling created a closing price reversal top — a technical pattern that often precedes corrective moves lasting a couple of sessions. If Monday’s trading confirms the signal, analysts see room for a pullback over the next two to three days.
The initial support level lies near $4162.71, the 50% retracement of the latest upswing. A sustained move below that could expose the minor swing low at $3944.43. If that area gives way, downside momentum would likely intensify, drawing attention to the 50-day moving average around $3675.27 — nearly $600 below where gold finished on Friday.
Dollar Strength and Trump Shift Hit Momentum
Friday’s drop wasn’t purely technical. A slightly stronger U.S. dollar added headwinds, with the U.S. Dollar Index edging up 0.1%, making gold more expensive for buyers using foreign currencies. December gold futures in the U.S. also retreated, settling 2.1% lower at $4213.30.
Gold had been poised for its largest weekly gain since 2008, largely driven by geopolitical concerns and safe-haven inflows. But sentiment cooled after former President Donald Trump softened earlier remarks about blanket tariffs on China, signaling instead that he plans to meet with Chinese leadership.
“Trump’s more conciliatory tone appears to have taken a little heat out of the precious trade,” said independent metals trader Tai Wong.
Long-Term Tailwinds Remain Intact
Despite the sharp daily decline, gold remains up more than 64% so far in 2025, underpinned by robust central bank buying, persistent geopolitical risk, and heavy inflows into gold-backed ETFs. Rate expectations are also lending support: markets are pricing in 25-basis-point Federal Reserve cuts in both October and December, a positive backdrop for non-yielding assets like gold.
Physical buying remains solid as well. In Asia, Indian gold premiums have climbed to their highest levels in a decade ahead of the festival season, helping to establish a floor for prices even if futures slip in the near term.
Near-Term Bias Weakens, Long-Term Outlook Holds Firm
Technically, gold appears vulnerable in the short run. A confirmed break lower from Friday’s reversal formation could set up a test of $4162.71, and possibly $3944.43. A decisive move under that level would shift market focus toward the 50-day average at $3675.27.
Until buyers push the market back above $4380.99, the immediate outlook leans bearish. Longer term, however, expectations of rate cuts and continued structural demand point to an ongoing bullish foundation.
About the Analyst
James Hyerczyk, the author behind this market commentary, is a veteran U.S.-based technical analyst with more than four decades of trading and teaching experience. He has written multiple books on price action and chart pattern strategies and has worked extensively across both the futures and equities markets.