Key Takeaways:
- Gold (XAU/USD) broke through long-term support after falling nearly 9% from the April high
- Deteriorating momentum has accelerated the selloff toward a critical pivot zone
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Gold breaks key support as 9% decline tests critical pivot zone
Gold (XAU/USD) broke through key long-term support on May 27, falling nearly 9% from the April high as momentum deteriorated.
"The growing technical risks facing gold prices are intensifying as momentum deteriorates and key long-term support levels begin to fail," Michael Boutros, senior market analyst at FOREX.com, said.
Gold is now approaching a critical pivot zone after the nearly 9% decline from the April peak. The breakdown follows a period of weakening price action that has shifted the near-term outlook decisively lower. Silver has followed gold lower, extending losses across the precious metals complex.
Traders are watching U.S. inflation data, Federal Reserve policy expectations, and geopolitical headlines from Iran for the next major catalyst. A further selloff could trigger stop-losses and margin calls, potentially deepening the correction and weighing on gold mining stocks and related exchange-traded funds.
The break of support marks a significant technical shift for gold, which had held above key levels through much of the recent rally. The current decline from April highs represents one of the steepest pullbacks in months, with the pivot zone now serving as the next major test for bulls.
The move lower comes as markets reassess the Federal Reserve's rate path, with stronger-than-expected economic data reducing expectations for near-term easing. Higher opportunity costs tend to weigh on non-yielding assets like gold. Meanwhile, uncertainty surrounding U.S.-Iran relations has added a geopolitical layer to the outlook, though safe-haven demand has so far failed to stem the selloff.
This article is for informational purposes only and does not constitute investment advice.
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