Retreating from the ceiling again, Gold risks correction

Concerns about the trade war between the US and the European Union and the retreat of platinum group metals allowed gold to break above the upper limit of the medium-term consolidation range of $3250-3400 per ounce. However, the White House's trade agreement with Japan and the reduction of import duties on Japanese goods brought gold back to the centre of the latest consolidation range.

Platinum and palladium, which showed impressive results in 2025, were the main beneficiaries of rumours that gold was overbought. Investors diversified their portfolios in favour of less expensive metals. However, due to the high share of demand from the automotive industry, platinum group metals are highly sensitive to tariffs. A reduction in import duties could restore the upward trends and put pressure on gold against the background of renewed capital outflows.

The leader of the precious metals sector is also vulnerable due to expectations of a reduction in the federal funds rate. The futures market forecasts 1-2 acts of monetary expansion in 2025 and is confident of three in 2026. The sooner the Fed begins to ease monetary policy, the better for gold.

At the same time, gold failed to consolidate above $3,450 for the fourth time since April. On the one hand, this is a sign of abundant supply at highs and the desire of players to close their long positions in gold, looking for alternatives. On the other hand, gold has been benefiting from strong catalysts this year: it was the first of the popular exchange-traded instruments to return to new highs after the shock of Trump's tariffs, and in recent weeks it has been rising in line with the recovery in risk appetite.

By the end of the week, the price of gold had fallen back to its 50-day moving average. A sharp drop below this line in the new week will be an important signal of a transition from consolidation to correction — roughly what we are seeing with Bitcoin at the end of this week. If gold moves into a correction, there is potential for a rapid move to $3,150 or even $3,050. The upper target is the area of highs before the ‘liberation day’ and 61.8% of the rally since the end of last year. The lower target is already close to half of this growth and not far from the 200-day moving average.