“Gold trades sharply lower after reaching another record high overnight. The nervously anticipated correction appears underway, triggered by end-of-month profit-taking and the onset of China’s Golden Week holiday, which typically removes a major source of physical demand from the market. The metal has rallied nearly 15% since Jackson Hole, supported by lower funding costs, geopolitical jitters, and political noise around the Fed’s independence, but the current pullback will help determine the durability of recent inflows.
Investor positioning remains elevated, with demand for bullion-backed ETFs seeing the strongest monthly inflow since March 2022 of 107 tons, and speculative longs holding near multi-month highs. This makes the market more vulnerable to profit-taking, though the longer-term backdrop remains supportive, driven by rate cuts, persistent fiscal debt and geopolitical concerns, the latter not only driven by wars but increasingly also the breakdown in the post WW2 world order.
From a technical standpoint, Fibonacci retracement levels point to initial support at USD 3,780, followed by USD 3,750, with USD 3,721 seen as key to maintaining the broader upside focus. Silver and platinum are extending the move at a faster pace due to thinner liquidity and their higher beta to gold.”
