Gold has failed to recover after reaching its all-time high earlier this year on January 29 at $5,596.70. At the time of writing, XAUUSD is trading around $4,183, leaving the metal 25.3% below that peak. The move has pushed gold beyond correction territory and firmly into a bear market.
Years of central bank buying helped drive gold steadily higher. Purchase volumes rose sharply from Q3 2022 onward, when official buying increased to 459.9 tonnes from 158.6 tonnes in the previous quarter. As often happens, the final speculative phase pushed prices into a parabolic rise before leaving many investors exposed near the top.
The safe-haven narrative has also failed to support gold. Despite ongoing wars, instability, and uncertainty, 2026 has brought persistent selling pressure for the yellow metal. Real long-term interest rates remain high and are still rising, reaching 2.195% this morning, with the 10-year breakeven inflation rate at 2.33%. However, these levels are not significantly different from those seen in autumn 2023, when gold was trading around $1,900.
Technical Analysis
The main positive signal for gold bulls is that the March 23 low at $4,099 has not yet been broken. Beyond that, the technical picture remains weak. The early spring selloff saw gold prices fall sharply after several consecutive down days. However, the metal rebounded quickly, with the daily close settling at $4,407.
The early spring selloff saw gold prices fall sharply after several consecutive down days. However, the metal rebounded quickly, with the daily close settling at $4,407.
That level has now weakened. There have already been four sessions closing below $4,407 and, more importantly, below $4,365. We now view $4,365 as the key level to watch. It acted as clear resistance in October 2025 and, until recently, had served as support, with no session this year closing below it.
The downtrend also remains firmly intact. Since May 7, XAUUSD has tested the trendline several times but has consistently failed to break above it.
The previous consolidation pattern, whether viewed as a triangle or a flag, now appears to have broken decisively to the downside.
Despite the 25% decline from the highs, our outlook on gold remains bearish. The $4,100 level, followed by $3,890, should act as important support zones. These areas may slow the decline or trigger temporary pauses, but they do not yet change the broader bearish structure.
Over a longer time horizon, the risk of significantly lower prices remains real. We cannot rule out the possibility that, several months from now, potentially in 2027, the first digit of gold’s price may no longer be a 4 but a 3.
That scenario would imply further downside potential of nearly $1,000 per troy ounce from current levels.
