Gold’s overall trend remains bearish after breaking a key support level at $2604.39 earlier this month. This move created a lower-bottom pattern within the range of $2790.17 to $2536.85, creating a primary retracement zone from $2663.51 to $2693.40.
The current short-term range, $2536.85 to $2721.42, defines another retracement zone between $2629.13 and $2607.35.
After rallying to $2721.42 last week, gold prices fell below the primary retracement zone and found near-term support.
A sustained move above $2629.13 could lead to a countertrend rally targeting $2663.51, while a breakdown below $2607.35 could lead to further declines towards the key support area near $2546.86 to $2536, 85.
Geopolitical optimism eases the demand for safe havens
Demand for safe-haven gold weakened on Tuesday after reports of possible ceasefire talks between Israel and Hezbollah, bringing optimism over geopolitical tensions. The prospect of a resolution dampened bullion’s appeal despite broader economic uncertainties.
Monday’s sell-off was further pressured by news that Scott Bessent, President-elect Donald Trump’s nominee for Treasury secretary, could signal a pro-business stance. Tariff threats against Canada, Mexico and China by Trump should further significantly strengthen gold’s safe-haven appeal as potential inflation risks create uncertainty about the Federal Reserve’s monetary policy.