Gold is Getting Cheaper, But It Is Not Critical

Gold on Monday fell to 4980 USD per ounce after rising more than 2% in the previous session. The volatility was driven by weaker-than-expected US inflation data.

Soft CPI data has boosted expectations of a Fed rate cut this year, and the market is now pricing in just over two cuts. Investors’ focus was on the publication of the FOMC minutes, a preliminary estimate of US GDP and PCE inflation data. All of them could clarify the timing of the regulator’s next move.

On the geopolitical front, attention is focused on the nuclear negotiations between the US and Iran, as well as the resumption of consultations on Tuesday to address the conflict involving Russia. These events could further affect risk appetite and demand for defensive assets.

Despite the current correction, gold remains supported by geopolitical uncertainty, continued purchases by central banks, and capital flows from sovereign bonds and currencies.

Technical Analysis

The H4 time frame for gold shows a transition after a sharp decline from the zone above 5500 USD to the consolidation phase. The price is held around 4980–5050, moving along the median line of the Bollinger Bands. Volatility has decreased noticeably, with a range forming. Key support stands at 4900–4920 USD, resistance at 5050–5100 USD.

The H1 chart shows a sharp drop to 4880 USD, followed by a rebound. Now the price is again testing the area 4970-4990 USD. The Bollinger Bands are narrowing – the market is bracing for another move. Pinning above 5000 USD will open the way to 5050 USD; the loss of 4950 USD will increase pressure towards 4900 USD.

Conclusion

In summary, gold’s modest pullback represents a healthy consolidation following an aggressive rally triggered by softer US inflation data. The fundamental backdrop remains constructive, with renewed Fed easing expectations, sustained central bank buying, and geopolitical tensions providing underlying support. Technically, the price is compressing within a narrowing range, signalling an imminent directional move. The critical threshold remains the psychological 5000 level: reclaiming it would target 5050 USD resistance, while sustained weakness below 4950 USD could open a retest of 4900 USD support. With key US data and geopolitical events looming, gold is poised for its next significant move.

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