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Gold Prices Retreat After Historic Highs — Correction or Deeper Trend Shift?

Gold prices fell for a second straight session on Wednesday, pulling back sharply from Monday’s record-breaking high of $3,509.90 per ounce. The decline comes as investors locked in profits and the U.S. dollar rebounded, creating headwinds for the precious metal.

As of the latest session, June Comex gold futures dropped $90.50, or 2.67%, settling at $3,301.50. This follows Tuesday’s volatile trading where prices swung more than $130 intraday — a dramatic shift that saw gold climb to an all-time peak before closing at $3,435.10.

Is This Just a Pullback — or the Start of a Correction?

While some analysts argue that the dip may signal a short-term correction, others believe this is a natural breather following an explosive rally. Gold had been riding high on dollar weakness and geopolitical uncertainty, gaining 4.56% month-to-date as of April 23.

Interestingly, the bulk of April’s gold rally appears to be tied to the U.S. dollar’s decline. The dollar index has slid from 104.13 to 99.89, a drop of 4.27% — contributing directly to the majority of gold’s recent gains. This raises a key concern: Is gold rallying on real demand, or just inverse dollar momentum?

Dollar Strength and Equities Rebound Apply Pressure

Traders have taken note of a slight rebound in the U.S. dollar, which recently climbed off multi-year lows, breaking above a critical support level of 99.25. Meanwhile, equity markets saw a strong rebound, further shifting investor attention away from safe havens like gold.

With stock indexes rising and bond yields stabilizing, gold’s momentum may be at risk unless new catalysts emerge — such as renewed inflation fears, escalated geopolitical tensions, or more aggressive central bank easing.

April Still a Strong Month for Gold – For Now

Despite the current retracement, gold is still having a stellar month. Prices opened April at $3,157.30 and remain up more than $140 as of now. If support near $3,275–$3,300 holds, bullish momentum could resume.

However, failure to hold above these levels may signal a deeper consolidation, with technical analysts pointing to $3,200 and $3,167 as next key support zones.

📈 Key Technical Levels to Watch (XAU/USD)

Resistance: $3,435.10 / $3,509.90
Support: $3,300.00 / $3,200.00 / $3,167.00

📝 Conclusion: Short-Term Caution, Long-Term Strength

Gold’s short-term pullback may rattle bullish sentiment, but the longer-term fundamentals — including central bank demand, economic uncertainty, and currency instability — continue to support upside potential. Traders should watch upcoming U.S. inflation data, Fed commentary, and geopolitical headlines to assess whether this dip is a buying opportunity or a signal of a larger trend shift.

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Hamza Shah