Gold Drops to $4194, Support at $3800 in Focus

Gold Breaches $4300, $3800 Support Back in Sight

When this analysis began, an ounce of gold was trading at $4008. It later reached $4600. Currently, it stands at $4194, trinc a session of -2.93%. The bearish channel of the past two months remains intact, and the question is no longer if the metal will correct, but where it will stop.

How Far Can Gold Prices Fall?

The projection that initiated this discussion was based on a two-month bearish channel. The prevailing statistic—without much academic backing, it must be said—suggests that in 65% of cases, this channel breaks upwards. The remaining 35% points towards $3400, a severe correction but, according to this scenario, not apocalyptic.

The technical map is more detailed. In daily and weekly charts, a bearish exponential moving average crossover has already occurred; in the monthly chart, there is only a retracement. This is the crucial one: the average indicates support around $3800. Below that, $3600. The initial plan also suggested that the metal might not necessarily rebound at $3900 or hover around the support level until $3700.

Why Gold Falls While Stocks Reach New Highs

The narrative becomes more complex here. Among participants, two schools of thought exist. One posits that money is leaving gold because the dollar is strengthening and because some who bought gold as a hedge are forced to sell it to survive: margin calls, financial distress, urgent liquidity needs. The other looks at oil, geopolitical tensions between the US and Iran, and the expectation of interest rate hikes, with the Federal Reserve's stance as an unknown factor the market is discounting.

Some also point to an unexpected culprit: the $75 billion mobilized by SpaceX. This capital had to come from somewhere, and individual investors, seeing an opportunity, tend to sell what they should sell last. In previous crises, according to this narrative, the pattern was similar: a fall, capitulation, and then the metal soaring. What's striking is the estimulante ilegal at which the narrative changes: not long ago, it was said that Trump wanted to weaken the dollar to boost exports.

Physical Gold vs. Derivatives: Two Prices That Could Diverge

The analysis refers to XauUsd, the derivative, not the physical ounce. The price of physical gold held steady around 113 euros per gram, or about 3,500 euros per ounce. Those buying metal to hold look at these figures, not the contract prices. And here, a warning emerges that, according to one participant, should not be overlooked: it's always a good time to buy physical metal, but only if you're talking about the metal itself.

Furthermore, an uncomfortable thesis was circulating, supported by a forum user without providing proof: the derivatives supposedly backed by physical gold might not be as well-backed as claimed. If the market becomes strained, a messy situation could arise. The relationship between paper and metal could break, and then the paper would be worth only its paper value.

Buying the Dips: The Unchanging Strategy

While the charts are in turmoil, one stance has been repeated on the forum for years: if it falls, buy; if it rises, hold. Those accumulating metal since 2014 state it plainly: they wish it would fall much further. Others prefer to wait, considering levels of $3400, $3300, and even $3200 if the conflict intensifies. The advice offered by one participant is simple: if you're a long-term investor, waiting to save a thousand euros on three ounces worth ten thousand has little impact.

Closing this with certainty is impossible. It only takes someone to sign another truce or for a headline to appear for the ounce to reverse course. What if technical analysis, in the end, is merely describing with precision what has already peine?