Gold prices continued to fall sharply despite rising geopolitical risks. During Thursday’s session, gold dropped to an intraday low of around USD 4,508 per ounce, marking a steep decline from its recent peak near USD 5,418 recorded in early March. This move came even as tensions in the Middle East escalated and concerns over the prolonged duration of the conflict continued to grow.

Although gold saw a modest rebound late on Thursday and during Friday’s Asian session, spot gold was still down nearly 8% for the week overall — its sharpest weekly decline since the beginning of 2020.

Notably, this latest sell-off has pushed gold decisively below the USD 5,000–5,200 per ounce consolidation range that had been maintained since the conflict began. This suggests that the market structure has shifted clearly in a more negative direction.

Safe-haven flows into gold are currently being overshadowed by the sharp rise in the U.S. dollar and U.S. Treasury yields, as markets grow increasingly concerned about the inflationary impact of higher energy prices. Oil prices this week climbed close to their highest levels in four years, particularly after attacks on energy infrastructure in the Middle East raised fears of supply disruptions.

The rally in oil prices has also prompted major central banks to issue warnings about energy-driven inflation. The Reserve Bank of Australia raised interest rates, while the Fed, ECB, SNB, and BOJ all kept policy unchanged but simultaneously emphasized the likelihood of maintaining a tighter stance in the period ahead. This environment is clearly unfavorable for precious metals.

Technical analysis: Early signs of a short-term bottom are beginning to emerge

From a technical perspective, gold has gone through a very sharp decline, falling by around 16% from its recent high above the USD 5,400/oz area. However, price action around the support zone near USD 4,500/oz is beginning to show notable signals, as gold has rebounded by more than USD 200/oz, indicating that buying interest is starting to emerge.

In terms of wave structure, the market is currently facing two main scenarios: ABC or ABCDE.

Under the ABCDE scenario, wave C in gold has most likely been completed around the USD 4,500/oz area, and the market is now entering a recovery phase from C to D. If this scenario is confirmed, the current rebound could continue in the short term.

By contrast, under the ABC scenario, wave C may not be finished yet. The current rebound would then be merely a technical recovery before prices continue to move lower. In that case, the next target could pull gold down toward the USD 4,400/oz area, and further out, if the U.S. dollar continues to strengthen, prices could potentially return to the USD 4,000/oz region.

What both scenarios have in common is that the market is currently showing a rebound. This is precisely the key zone to observe the internal price structure whether this recovery is the beginning of a reversal or simply a pause before the downtrend resumes.

Conclusion

Although the sharp decline has temporarily slowed around the USD 4,500/oz area, it is still too early to confirm that this marks the market bottom. The current rebound plays an important role in confirming the next phase of the price structure.

In the short term, price behavior during this recovery phase should be monitored closely. If the upward structure becomes clearer and more sustainable, the likelihood of a short-term bottom will increase. On the other hand, if the rebound weakens and is quickly sold into, the scenario of a deeper decline will remain dominant.

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