Gold Prices Started the Week with a Decline: Critical Levels Under Watch

The Decline in Gold Prices Continues

On the first trading day of the new week, gold prices continue their decline, putting pressure on investors. Spot gold has dropped to as low as $4,040.78 in the morning hours. Currently, it is trading at $4,046.79, reflecting a decrease of 0.55% compared to Friday's close.

Impact of the Dollar Index

Analysts emphasize that the dollar index is hovering around its highest levels in the last six months, remaining above 100 points. This situation is believed to be exerting significant downward pressure on gold. Jigar Trivedi, a senior research specialist at Reliance Securities, stated that the strengthening of the dollar negatively affects gold prices.

Critical Support Level: $3,995

According to analyses, spot gold prices are expected to retest the $3,995 support level. A move below this level could lead to a decline in prices down to $3,937. Technical analyses of gold indicate that the current situation should be monitored closely.

Technical Analysis and Possible Movements

Technical indicators show that gold is attempting to hold above its rising trend line. The buying response from $4,022 has been relatively weak compared to the prior rise that started from $3,988. If the price can break above the $4,101 resistance, it could expand to the $4,170–$4,243 range, starting from $3,998.

Expectations of Interest Rate Cuts Have Weakened

The dollar index being flat at a six-month peak on Friday has caused gold to become more expensive against other currencies. According to the CME FedWatch Tool data, the expectations for an interest rate cut next month have decreased from 74% to 69%.

Geopolitical Risks and Gold

Trivedi emphasized that limited geopolitical risks may cause gold to exhibit a sideways-negative outlook over the next 3-5 weeks. Additionally, it was noted that the efforts of the US and Ukraine to end the conflict with Russia continue.