High Volatility in the Short Term, but the Overall Trend Remains Upward
Gold prices have seen sharp movements in recent days, reflecting the prevailing uncertainty in global markets. With expectations rising regarding US monetary policy, gold remains vulnerable to significant volatility in the short term, despite the continued fundamental support for the long-term upward trend.
The Spark of Gold's Recent Decline
Reports indicated that US President Donald Trump intends to nominate Kevin Warsh, known for his more hawkish views, to head the Federal Reserve. Many market analysts believe this news was a major factor behind the sharp decline in gold prices last Friday, as it reinforced expectations of a tighter monetary policy that could put downward pressure on the price of the precious metal.
In addition, profit-taking exacerbated the decline after a series of continuous gains that propelled gold to record highs in previous weeks.
Gold's Performance at the Start of the Week
At the start of trading on Monday, gold prices fell to around $4,404 per ounce, their lowest level in four weeks. However, this decline was short-lived, as the price rebounded to approach the $4,600 per ounce level again, indicating continued strong demand at support levels.
Is the Correction Over or Continued?
Gold is likely to remain volatile in the near term, especially after rising by nearly 24% during January, before losing more than half of those gains in a single session at the end of the month. This price correction was largely expected, given the strong and rapid rise gold experienced throughout 2025 and the beginning of 2026.
Technical Outlook and Future Outlook
Despite the possibility of further short-term declines, the overall trend for gold remains bullish according to current market data.
The factors supporting gold's rise, such as geopolitical tensions, inflation concerns, and safe-haven demand, remain in place and have not fundamentally changed.
Advice for Traders and Investors
We advise traders and investors to exercise caution in the coming period and adhere to risk management guidelines, especially given the expected high volatility.
It is also recommended to monitor key support and resistance levels before making any trading decisions.
We have discussed the most important gold buying levels in detail in our weekly metals analysis video, which outlines potential price movement scenarios for the coming days.
