The Price of Gold Continues Sliding. Investors Should Monitor These Critical Levels

Core Insights - Gold's recent decline is attributed to profit-taking after strong gains, with the price falling from a record high [1][8] - The spot price of gold has dropped below $3,900/oz, influenced by positive developments in U.S.-China trade talks, which reduced demand for gold as a safe-haven asset [2] - Despite the recent drop of 11% from its peak, gold remains approximately 50% higher year-to-date due to economic uncertainties and geopolitical tensions [3] Technical Analysis - Gold's price retracement began after reaching an all-time high on October 20, with the relative strength index indicating a decrease in bullish momentum [4][8] - The price fell below the 38.2% Fibonacci retracement level, suggesting potential for a deeper short-term pullback [4] Support Levels - Key support level to monitor is around $3,850, aligning with the 50% Fibonacci retracement level and the 50-day moving average [6] - Another significant support level is at $3,720, which corresponds with the 61.8% Fibonacci retracement level [7] - A further decline could see gold approaching $3,450, while a key overhead resistance level to watch is near $4,380 [8]