Gold Slides to $3,337 but Structure Holds as Traders Absorb Pullback
Gold is currently trading at $3,337.07, down 0.94% on the day, but the move is far from a structural breakdown. After peaking at $3,368 earlier this week, XAU/USD entered a profit-taking phase that remains shallow in depth and well-contained in volume. The pullback is being absorbed in the $3,330–$3,325 range, an area that acted as prior consolidation in late July and now emerges as the first critical support. The move lower has been met with measured dip-buying from both macro funds and CTAs, with spot gold maintaining a position above its 50-day EMA for 26 consecutive sessions. That trend is intact. The $3,368 zone, which now confirms itself as double-top resistance dating back to the May peak, created an initial rejection as momentum buyers de-leveraged, but no technical damage was done to the higher-low structure. The pullback lacks the characteristics of panic. There is no explosive volume, no RSI divergence, and no breakdown in gold’s volatility regime. The VIXGC remains flat, suggesting the retreat is flow-driven rather than risk-off. Until gold loses $3,315 on a daily closing basis, the underlying pattern is bullish continuation. Bulls remain in control of the broader move from the $3,105 breakout, which ignited on Chinese stimulus headlines and continued as central bank demand returned to the tape. Traders with shorter timeframes are leaning against the $3,325 level with tight stops, while larger players are holding positioning for another leg toward $3,410.
Central Banks Reinforce the Floor as Speculators Step Aside
Macro flows remain overwhelmingly supportive. Central banks are not participating in the pullback—they are sustaining it. The PBoC added over 360,000 ounces in July, and while the pace is slower than earlier this year, the consistency matters. Turkey resumed net gold purchases for a third straight month, and Kazakhstan followed with a 2.5-tonne addition. Central bank buying in Q3 is now tracking at an annualized rate of over 850 tonnes, keeping pace with 2022 and 2023 trends, both of which set post-Bretton Woods records. That demand is critical because it does not chase price. Unlike retail ETF holders, sovereign allocators have no liquidation triggers and no margin calls. They buy regardless of short-term volatility and hold for reserve diversification. This is the foundational demand layer that defines the modern gold market. On the speculative side, ETFs posted $870 million in net outflows this week, mainly from short-duration holders in Europe trimming exposure after the July rally. But even this retreat is modest when compared to 2022 or early 2023, where weekly drawdowns exceeded $2.4 billion. Institutional buyers are not rotating out of gold—they are trimming exposure at a time when bond yields and risk assets like equities are marginally outperforming. Meanwhile, gold remains the only major asset class up over 18% year-to-date, excluding crypto. Sovereign flow is dominating the spot floor, and the selling from retail is not strong enough to reverse trend momentum.
Technical Setup Still Supports $3,410 Breakout If $3,315 Holds
Technically, gold remains within a textbook bullish channel. The rejection at $3,368 is a reversion move within an uptrend, not a reversal. RSI sits at 57, cooling off from its near-overbought condition earlier this week but still holding well above the median line. The MACD histogram is flattening, signaling digestion rather than reversal. The zone between $3,330 and $3,315 is structurally vital. A close below $3,315 would break the higher-low series and open risk to a deeper flush toward $3,290 and potentially $3,255, where the 100-day EMA and lower trendline converge. But if the $3,325–$3,330 floor holds, gold is set to coil and retest the $3,368 resistance. This level now acts as a gatekeeper to the next leg higher. Above $3,368, the fib extension points to $3,410, which also aligns with the upper Bollinger Band and a heavy cluster of options open interest expiring next week. Beyond $3,410, the measured move from the previous range targets $3,435. On-chain COMEX flow data shows declining open interest during this pullback, suggesting longs are not being forced out. Volume remains shallow, further supporting the idea that this move is a controlled retest. Gold’s trend remains intact as long as momentum indicators don’t roll over aggressively, and the path of least resistance remains to the upside unless $3,315 is lost decisively.
Macro Backdrop Still Gold-Friendly as Real Yields Stay Anchored
Fundamentals remain in gold’s favor. Real yields, the most important driver for non-yielding assets like gold, remain anchored near multi-month lows. The U.S. 10-year TIPS yield is holding below 1.75%, and inflation expectations continue to firm as oil prices rise and China’s stimulus props up global manufacturing. The Federal Reserve remains in data-dependent mode, but the bond market is pricing in at least one cut before year-end. That expectation puts pressure on real rates and maintains the carry advantage for gold. Simultaneously, the U.S. dollar is struggling to reclaim momentum. After peaking near 106.2 on the DXY index, the greenback has stalled, giving room for gold to advance in local currency terms globally. In euro, yen, and rupee terms, gold is still near record highs. The broader macro landscape is one of fragile disinflation, central bank balance sheet stress, and geopolitical hedging. That combination continues to drive long-dated institutional demand for gold as a reserve and collateral asset. While equities hover near all-time highs, their correlation with gold has diverged. Investors are holding both for different reasons: risk-on for growth, and gold for optionality and capital preservation. That dual allocation trend is why pullbacks like this are being bought — not sold.
