Is the Gold Bull Run Over? Major Bearish Signal Hits XAU

Gold is facing a tough reality check as it dips below 4,000 dollars. The metal is now down 28 percent from its January peak of 5,598 dollars. A key technical indicator, the Gaussian channel, has turned red on the weekly chart for the first time since late 2023. This change suggests that the recent price action is more than a simple correction and may mark a shift into a confirmed bear market.

Surprisingly, global conflict and energy supply issues are not helping gold prices. Rising oil prices have triggered fears of higher inflation, which leads investors to expect further interest rate hikes from the Federal Reserve. Since gold does not pay interest, investors are moving money away from the metal and into assets that benefit from higher yields. This is highlighted by massive outflows from major gold ETFs, which have lost 14.4 billion dollars since March.

Technically, gold has broken below important support levels that previously kept the trend positive. It is now testing the 3,943 dollar mark. If it fails to hold here, the next major support zone sits near 3,552 dollars. While some traders are looking for a relief rally based on recent momentum indicators, the metal faces a difficult ceiling between 4,300 and 4,400 dollars.

Moving forward, watch the 4,300 dollar level closely. A failure to break back above this resistance will likely signal further downside. Traders should keep an eye on upcoming inflation reports and news regarding Federal Reserve policy, as these factors remain the primary drivers of the current market trend.