Compression Breeds Capitulation: Gold Slips as Momentum Ebbs

Gold endured a frustrating and ultimately bearish week, closing around $3,343, with a steady bleed lower that accelerated late in the week. What began as a tightly coiled range devolved into a breakdown, as buyers failed to defend key support and sellers capitalised on thinning momentum and broader macro indifference.

For much of the week, gold traded in a narrowing band, with price action compressing beneath a downward-sloping trendline. This structure capped every bullish attempt above $3,377, while support around $3,365–$3,368 was tested repeatedly but held—until it didn’t. Price danced around the 200-hour moving average early in the week, occasionally reclaiming it but never holding with conviction. The pattern was one of steady distribution, not accumulation.

By Thursday, fatigue gave way to failure. After one last false breakout attempt into $3,375, price was swiftly rejected and rotated lower. The $3,365 shelf, having absorbed multiple assaults, finally gave way. Price slid cleanly through it with increasing velocity, carving new lows into $3,342 before briefly rebounding late Friday.

Technically, the breakdown was foreshadowed. A descending triangle had formed over the course of the week—flat support, lower highs—and the rejection at trendline resistance on the 18th sealed its fate. That the selloff occurred with little macro news and no external catalyst was telling. Positioning had become top-heavy, and the absence of fresh bids left gold vulnerable to even modest selling pressure.

The broader context didn’t help either. US Treasury yields remained sticky near recent highs, the dollar caught a modest bid, and risk appetite in equities remained firm—removing key sources of gold demand. The geopolitical calendar was light, and central bank guidance leaned neutral, offering little urgency for hedging via bullion.

While the late-Friday bounce off $3,340 provides short-term relief, the path of least resistance now tilts lower. Gold would need to reclaim the $3,366–$3,377 zone to negate this week's structural damage. Otherwise, traders may begin targeting the $3,322 area—a former breakout base from May—as the next test of conviction.

For now, the market has spoken. The coil has snapped, and gold finds itself again searching for equilibrium in a less supportive regime.