Gold prices edged lower on Monday, extending the weakness seen at the end of last week as concerns grew over the possibility that the United States may continue raising interest rates. Meanwhile, renewed tensions in the Gulf region pushed oil prices sharply higher, adding further concerns about global inflation.

Spot gold fell 0.2% to USD 4,321.49 per ounce at 01:24 GMT. Earlier, on Friday, gold prices had dropped by around 3%, falling to their lowest level since March 24 after a stronger-than-expected U.S. jobs report reinforced expectations that the Fed may maintain a tighter monetary policy stance for a longer period.

Technical Analysis: The Downtrend Still Dominates

The sharp decline on Friday invalidated the previously mentioned bullish scenarios after the key condition level at USD 4,366 per ounce was broken. This shows that sellers remain in control of the market and forces us to reassess the overall picture for gold prices.

Scenario 1: The Correction from Yellow A to Yellow B Has Not Yet Ended

In this scenario, gold remains in a corrective move from Yellow A to Yellow B. The current selling pressure has not yet shown clear signs of exhaustion and could continue to drag prices toward lower support zones in the near term.

Only when Yellow B is fully formed will the market have a stronger basis to expect a new upward move from B to C. However, this would need to be confirmed by price structure, reversal patterns, and supporting signals from the trading system. Until these conditions appear, the downtrend remains the dominant direction.

Scenario 2: The Long-Term Downtrend Has Returned

In addition to the short-term corrective scenario, we also need to pay attention to the possibility that White B has already been established around the USD 4,889 per ounce zone. If this assumption is correct, gold is entering a larger bearish cycle from White B to White C on the Daily timeframe.

This is a more negative scenario for gold prices. In this case, the current recovery attempts would only serve as corrective rebounds within a broader downtrend, and the market could potentially return to trading below the USD 4,000 per ounce level in the coming months.

Conclusion

The loss of the USD 4,366 per ounce level has made the technical outlook for gold significantly less positive. Although it is still too early to confirm that a long-term bearish cycle has officially begun, bearish scenarios currently carry more weight than bullish ones.

Therefore, investors should prioritize monitoring the lower support zones and wait for clearer confirmation signals before expecting the return of a sustainable uptrend. In the short term, the downtrend remains the key factor to watch.

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