GOLD: Down 1.6% With Key Supports Breached

Spot gold is off session lows but still down 1.6% on the session, pushing through two key-term support levels at $3290.9 (50-day EMA) and $3294.8 (trendline drawn from the Dec 30 ‘24 low). A clear break of both support points would signal scope for a deeper correction - this would expose $3245.5, the May 29 low.

• The combination of easing Israel/Iran tensions and increased trade deal optimism has weighed on spot this week, with today’s technical breach bolstering downside momentum intraday.
• This afternoon’s weaker-than-expected US consumption data may have also added pressure on the margin, though we note that 5-year US TIPS yields are now back at pre-data levels.
• While the latest pullback in gold may prompt some long covering amongst shorter-term investors, it likely won’t impede structural demand of key long-term, relatively price insensitive buyers, such as Central Banks.
• 95% of respondent's to the World Gold Council's 2025 Central Bank Gold Reserves Survey believe total central bank gold reserves will rise over the next 12 months. In a similar vein, "a record 43% of respondents believe that their own gold reserves will also increase over the same period", while "none of our respondents anticipate a decline in their gold reserves".
• Latest key levels from our technical analyst:
  • RES 4: $3578.0 - 2.000 proj of the Dec 19 - Feb 24 - Feb 28 swing
  • RES 3: $3547.9 - 1.764 proj of the Feb 28 - Apr 3 - Apr 7 price swing
  • RES 2: $3500.1 - High Apr 22 and bull trigger
  • RES 1: $33346.5/3451.3 - 20-day EMA / High Jun 16         
  • PRICE: $3262.9 @ 14:36 BST Jun 27
  • SUP 1: $3245.5 - Low May 29
  • SUP 2: $3204.7 - Low May 20
  • SUP 3: $3121.0 - Low May 15 and key support
  • SUP 4: $3085.0 - 76.4% retracement of the Apr 7 - 22 bull leg  

Figure 1: Spot Gold (Source: Bloomberg Finance L.P)