Gold’s rally has stalled after the recent bullish breakout. Still, there is very little evidence to suggest that the nascent rebound is over.
The yellow metal has maintained a weak tone for much of this year; it shed nearly 30% from its record high of 5602 hit in January 2026 in the first 6 months of this year.
However, XAU/USD found a strong cushion around the psychological 4000 mark. Furthermore, the rise in August above a crucial barrier at the early-July high of 4202 has brought some life back after a few months of slower price action.
As we have highlighted in recent updates, structural drivers continue to underpin gold, including global central banks’ reserves diversification, lingering geopolitical concerns, and demand from electrification and AI-related infrastructure.
Spot Gold (XAUUSD; Daily):
Worries regarding ballooning US debt and rising long-end US Treasury yields leave open the possibility of investors switching to alternative safe-haven assets, like gold.
This explains why, despite the recent rise in yields, gold has in fact rebounded – in general, gold is negatively correlated with yields/interest rates.
For some of these reasons, we thought 4000-4100 would be a decent area to dollar-cost average from a long-term perspective. Regular followers would know that our hypothetical positional bid placed at 4100 got filled on 11 June.
For more details on the levels and the fundamental/structural story highlighting the case for turning bullish, see “Gold: Downside Could Be Limited,” dated 10 June 2026, and “Gold: Long Bid Gets Filled,” released on 24 June 2026.
Spot Gold (XAUUSD; Weekly)
Looking ahead, gold’s recent retreat has raised some concerns regarding the sustainability of the rally. However, it would be premature to conclude that the nascent rebound is over.
Gold hasn’t broken any vital support yet to suggest a breakdown in the uptrend. Initial support is at the mid-August low of 4311; stronger support is at the early-July high of 4202. Only a break under 4202 would pose risks to the upward trajectory.
On the other hand, gold needs to clear a crucial barrier at the mid-April high of 4890 to confirm that the rebound from July is for real, that is, a sign of resumption of the long-term uptrend.
In the absence of such a break, the risks of a broad range of 4000-5000 would increase.
