Gold prices have declined over 2% this week, breaking an eight-week streak of gains. This decline is influenced by recent increases in the dollar and external pressures from tariffs.

Technical analysis suggests a potential deeper decline towards the 100-day moving average at $2,720. Currently, the market appears overdue for a correction after a long period of stability.

The 4-hour chart indicates a shift in momentum, particularly with the 100-bar moving average breaking. Key levels to monitor include the 23.6 Fib retracement at $2,868, the 200-bar moving average at $2,830, and the 38.2 Fib level at $2,814.

While there is downward momentum in gold, identifying opportunities for dip buyers is essential. Central banks remain bullish on gold, with China increasing its gold reserves.

The seasonal advantage from December to January has ended, suggesting a market correction is underway, allowing potential opportunities for buyers.

Gold’s recent pullback has brought an end to its consistent rise, and the reasons behind it are not hard to identify. A stronger dollar has applied pressure, making the metal less attractive to international buyers. New tariff developments have only added to the headwinds. Given this backdrop, attention has now turned to whether this is merely a short-term cooling or the beginning of a deeper slide. The technical picture does not rule out further losses in the days ahead.

The break below key moving averages on shorter timeframes suggests that sentiment has weakened. If momentum continues in this direction, the 100-day moving average near $2,720 could be tested, bringing the most recent rally firmly into question. However, gold has had a habit of finding strong support after declines. Traders looking for a return to strength will want to see a recovery above resistance levels. The first hurdle sits at $2,868, aligning with the 23.6% Fibonacci retracement. Should prices push beyond that, the next critical test will be at $2,830, where the 200-bar moving average currently stands. Further down, $2,814 marks another level of interest, as buyers may step in around the 38.2% retracement.

Beyond charts and technicals, gold’s broader support remains intact. Central banks continue accumulating reserves, with China extending its purchases. This strengthens confidence in the long-term case for holding the metal, even as pressures from currency fluctuations and policy decisions create volatility. While the December-to-January seasonal boost has now faded, history suggests that corrections often open doors for those with a longer-term perspective.

The next several weeks will require a careful approach. The recent breakdown demands respect, but the fundamental factors that underpinned gold’s multi-month rise have not vanished. Whether fresh buyers emerge or further weakness takes hold will depend on how prices behave around the identified levels.