GOLD corrects after hot rally, conditions remain optimisticOANDA:XAUUSD has retreated from an all-time high of $3,167.67/oz as investors began to take profits after a “parabolic” rally. While the rally was initially fueled by safe-haven demand stemming from US President Donald Trump’s plans for higher tariffs, questions are starting to arise about the sustainability of the rally as buying pressure wanes and the Relative Strength Index (RSI) moves into overbought territory.
Gold has rallied 19% so far in 2025 and this correction could be temporary
Gold prices have rallied 19% this year, supported by multiple macro uncertainties, historic central bank buying and continued inflows into ETFs. Despite the current pullback, from a fundamental perspective, this does not impact the overall bullish fundamental trend and the likelihood of near-term technical consolidation has begun to increase.
Trump’s tariffs a “catalyst” supporting the physical gold market?
Trump's proposal to impose 10% tariffs on most imports has stoked market concerns about slowing economic growth and rising business costs, while risk aversion has pushed gold prices higher.
However, the White House later clarified that "critical raw materials" including gold, copper and energy would be exempt, alleviating some concerns about supply chain disruptions and providing some support to the physical gold market.
Market sentiment remains bullish, with strong buying momentum on dips
Although the technical side is currently under some pressure, the market's optimism remains unshaken. It is difficult to try to assess the peak near the historical high, but it is clear that every pullback is quickly absorbed by buyers, which shows that the underlying bullish sentiment in the market is still strong.
Described by the sharp drop on Thursday, gold recovered very quickly after the drop.
Technical Outlook Analysis OANDA:XAUUSD
Gold may enter a correction phase after a long period of hot growth, depicted by the Relative Strength Index (RSI) falling below the overbought level, breaking the blue bullish channel. In the short term, if gold breaks below the short-term channel, converging with the 0.50% Fibonacci extension level, it will be in a position to correct further with the next target level around $3,066 in the short term, more than $3,040.
However, overall, gold still has a bullish technical outlook with the price channel as the long-term trend and the main support from the EMA21. As long as gold remains within the price channel and above the EMA21, the declines should be considered as corrections and not a trend. On the other hand, once gold recovers from the 0.50% Fibonacci extension and holds above the raw price point of $3,100, it will signal the end of the correction cycle, then the upside target will be the 0.786% Fibonacci extension in the short-term.
During the day, the long-term uptrend with the possibility of a short-term correction will be noticed again by the following positions.
Support: 3,086 – 3,066 – 3,040USD
Resistance: 3,100 – 3,106 – 3,135USD
SELL XAUUSD PRICE 3147 - 3145⚡️
↠↠ Stoploss 3151
→Take Profit 1 3139
↨
→Take Profit 2 3133
BUY XAUUSD PRICE 3061 - 3063⚡️
↠↠ Stoploss 3057
→Take Profit 1 3069
↨
→Take Profit 2 3075
