On Monday, spot gold reached a new high during the rally before beginning to consolidate, with U.S. trading oscillating around $4,330. Behind this correction are two competing forces: on one hand, expectations of declining inflation data combined with Federal Reserve policy adjustments directly influence the medium- to long-term direction of gold prices; on the other hand, signals of easing geopolitical tensions have started to release previously accumulated safe-haven demand, and many long positions are eager to lock in profits at high levels.

Today’s market shows an interesting phenomenon — silver has fallen more than 5%, while gold’s decline is relatively mild. This precisely indicates a divergence in risk aversion: when uncertainty decreases, investors tend to prefer holding the less volatile gold, while quickly selling off the more volatile silver. Additionally, some sectors in the stock market are weakening, slightly increasing market risk appetite, leading to a reduction in high-volatility assets. This sentiment transmission has ultimately also affected gold.

In essence, the sharp plunge in silver is the result of multiple factors: tight liquidity at year-end, investor rebalancing needs, and technical pressure all working together. Overly rapid gains naturally lead to profit-taking and liquidation pressures.

Let’s see how gold will move next: the key level to watch is $4,350–$4,360. The rebound after yesterday’s decline faced resistance here, and the short-term moving averages have formed a death cross, exerting downward pressure. If prices surge into this range early in the session, it’s likely lacking sufficient volume support, and a reversal could occur upon reaching it.

Support levels are at $4,300–$4,280. These are not only yesterday’s lows but also the starting point of the previous upward trend. The forces of bulls and bears will likely clash here. A first test of this range could be an opportunity to consider a light long position; if it is effectively broken downward, then the key level to watch is whether $4,250 can hold.

Overall, establishing long positions in the $4,280–$4,305 range in batches is not problematic, with the first target around $4,350–$4,400. If a clear breakout above this resistance zone occurs, the value of the position will increase even more.