Gold prices have fallen by $60 to $3187 after breaking the May 1 low and breaching the May bottom of $3202. The effort to establish a double bottom at $3200 failed due to easing tensions in the trade war and a ceasefire between India and Pakistan.

Support might be found at the early-April high of $3167, with additional support at $3150. If these levels do not hold, prices could move towards $3100 and further down to the significant $3000 level, indicating a possible return to the post-Liberation ‘sell everything’ low levels.

Market Dynamics

What we’ve seen so far suggests that the early attempt to carve out a foundation near $3200 has not held up under pressure. The sharp drop in price, accelerated by dissipating geopolitical friction and a temporary quietening on the Sino-Indian military front, left no room for bullish stability to take root. That double-bottom attempt was washed away once tensions eased and nervous sentiment began to lift. We’re currently observing a decline in the value of gold not driven by waning fundamentals, but rather by a series of quick sentiment reversals tied to external catalysts—none of which offered enduring support.

Now, attention turns to the next potential fail-safes. The early-April high at $3167 is being tested, albeit without much enthusiasm from buyers. Market participants seem hesitant, likely rattled by the speed and strength of the fall. The line around $3150 is even thinner—almost brittle in its ability to cushion continued downside. Should price falter here too, we may be staring at another return to levels that haven’t been revisited in any meaningful way since the post-Liberation slump.

What’s particularly telling is the consistency in how bears have been pressing their case. Selling pressure hasn’t been sporadic or reactionary—it’s been methodical. That tells us something. It’s not only the shift in newsflow; it’s the absence of counteraction. No discernible defensive positioning has shown up in the options market either. Skew remains tilted heavily to the puts, and implied volatility on near-term contracts has only just begun to pick up again after a lull, implying that participants are bracing for deeper moves downward, rather than bounce.

From our position, we see a market where actual buyers are notably thin. There may be some stop-and-start interest trying to hold price somewhere between $3160 and $3150, but the dominant activity comes from systematic sellers removing positions that no longer serve them. Whenever we begin to close in towards $3100, the hesitation observed earlier is likely to fade. That level carries historical gravity—it’s been a price area where pain was concentrated and amplified in past years, especially during sharp deleveraging periods.

Psychological Levels

And there’s also the lurking weight of $3000. Not merely a round number, but one that’s carried psychological baggage in previous sell-offs. If we start flirting too close to that region, the technical picture shifts considerably. Earlier retracement zones lose their relevance; the former supports morph into resistance. For those active in futures or structured options, that would suggest a recalibration of both time horizon and strike selection is warranted now—no room for ambiguous hedging anymore, and aggressive profit-taking on short-term calls may begin to set the tone if momentum doesn’t abate soon.

It is also worth mentioning the kind of flows we’ve started to track in the leveraged exchange space. These have been net outflows consistently now for seven sessions. That’s rare. And when paired with flat to soft physical demand indicators from the Asia-Pacific region, it creates the picture of a vacuum beneath the current price.

The weekly candle formations tell us plenty about trader resolve—or the lack of it. The selling isn’t panicked, but it is organised. Powell’s testimony last week didn’t provide anything near the interest rate jolt some had been positioning for, and that air pocket left in the narrative was instantly reflected in December gold futures being hastily unwound.

So now, with live trading floors more focused on aligning rolling risk through end-of-quarter expiry, short-duration trades are dominating the moves. We’ve reduced gamma exposure ourselves at $3200, let go of residual longs on Tuesday’s pop, and are now watching the 14-day RSI test its early-March levels. That’s not to project reversal, just to highlight where elastic may begin to stretch.

Prices may find temporary footing within the upcoming range, but barring some unforeseen headline or broad risk-off tone, there’s little from a flows perspective to suggest a rebound is likely to be immediate. Timing options around that premise becomes increasingly precise—sell strength, monitor volume per handle, and avoid triangulating too far ahead. Retest zones remain key only so long as volume-fed conviction accompanies them, which so far has been absent across sessions.

This remains a seller-controlled feed, until there’s proof otherwise.

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