Editor’s Note
This analysis highlights key factors behind gold’s recent decline to a ten-day low, including easing geopolitical tensions and softer US inflation data. Market focus is shifting toward potential long-term policy implications.
The XAU/USD chart shows that the gold price has fallen below the low of February 12, marking a new ten-day low. Media coverage has pointed to several reasons behind this weakness:
→ Geopolitical risks have eased. Ongoing talks involving the US and Iran, as well as Russia and Ukraine, have reduced the demand for safe-haven investments.
→ US inflation data has softened. This could lead to a shift in market expectations regarding the Federal Reserve’s policy stance in 2026.
→ Low trading volume due to holidays. The US Presidents’ Day and the Lunar New Year in Asia have led to thin trading, creating a bearish market sentiment and increasing the likelihood of sharp, speculative fluctuations.
→ Reconfirmed the relevance of the long-term ascending channel;
→ Highlighted that after a sudden spike in volatility at the end of the month, the market could move towards stabilization;
→ Suggested that price fluctuations were likely to decrease, with potential stability observed around the $5,000 psychological level.
Between February 9 and 12, price action confirmed this view, forming a consolidation band just above $5,000—specifically between resistance R1 and support S1.
The failed breakout to the upside (marked by an arrow) highlighted a lack of sustained bullish momentum, creating a kind of trap for buyers.
This development favored sellers, who managed to push prices below S1. The former support later turned into resistance (R2).
The recent decline indicates:
→ Sellers continue to dominate, as evidenced by the break of secondary support S2;
However, the lower boundary of the long-term rising channel remains a critical support area that could favor buyers.
It is noteworthy that during February, the price has twice returned within the broader upward channel. The potential for continued movement within this structure remains. Furthermore, a solid breakout above the descending resistance line (shown in red) would strengthen the possibility of a bullish flag breakout scenario.