Gold Pulls Back After Parabolic Run – Trend Break or Buying Oppo

Gold has been on a relentless tear, climbing within a well-defined rising channel since early January. But after touching $2,950, the rally has finally hit turbulence, with prices pulling back sharply to $2,895 (-1.94%).

Is this just a healthy correction, or is the yellow metal gearing up for a deeper decline?

🔍 The Setup – A Near-Perfect Rally Faces Resistance
For weeks, gold’s uptrend has been supported by:
✅ Strong bullish momentum – A nearly uninterrupted climb since mid-December.
✅ Consistent higher highs & higher lows – A textbook channel breakout pattern.
✅ Macroeconomic tailwinds – Expectations of rate cuts, inflation concerns, and geopolitical risks fueling demand.

However, today’s break below the rising channel is the first real test for bulls in 2024.

⚠️ Key Technical Developments:
📉 Break of the rising trendline – A potential early warning sign of trend exhaustion.
🟡 First major pullback since early Feb – A change in market behavior.
🔻 Bearish MACD crossover developing – Suggesting momentum may be fading.

🧐 What Comes Next?
Gold now sits just above initial support at $2,850-$2,860. A firm close below this zone could open the door for a deeper pullback toward:
🔹 $2,780-$2,750 – Near the 50-day EMA and a logical dip-buying region.
🔹 $2,700-$2,680 – The next major Fibonacci support if selling intensifies.

For bulls to reassert control, we need to see a strong bounce off $2,850, with a reclaim of $2,950 putting gold back on track toward $3,000.

💡 The Bottom Line
This pullback could simply be a shakeout before the next leg higher – but if momentum keeps fading, it may mark the beginning of a deeper retracement.

With inflation data & Fed commentary on deck this week, expect heightened volatility.

🔥 Buy the dip or step aside? What’s your play?

📌 Keep your eyes on that $2,850 level!

- MW