Gold prices recently fell for the third consecutive day, retreating to around $4,080 per ounce, reflecting a technical correction after a series of gains. Investors are assessing the outlook for global trade concerns to gauge the continued boost to safe-haven assets from geopolitical tensions.

Gold has fallen nearly 6% over the past two days, retreating from its record high. According to market research, technical indicators suggest that gold's rise may have exceeded its reasonable range, and this week's pullback is seen as a market "cooling" rather than a fundamental change.

Since mid-August this year, the "currency devaluation trade" has become an important factor driving the growth of gold, with investors avoiding sovereign debt and currency markets to protect against budget deficits and inflation risks.

Gold is still up about 55% this year, with recent price gains also supported by market bets that the Federal Reserve may implement at least one 25 basis point interest rate cut before the end of the year.

Hebe Chen, an analyst at Vantage Global Prime Pty Ltd, said: "After an overbought market, gold is rebounding strongly like an overstretched spring. The price stability above $4,000 suggests that this is a technical adjustment rather than a fundamental shift. The demand for safe assets and the 'currency devaluation trade' dynamics remain."

Traders also focused on global trade developments. U.S. President Trump predicted a "good deal" at his upcoming meeting with Asian leaders, but acknowledged that talks might not proceed as planned.

Chen added, "The market maintains a balanced attitude towards trade and geopolitical noise—cautious yet realistically optimistic." Furthermore, silver prices continued their downward trend after falling 7.6% over two consecutive days, while palladium prices rose and platinum prices fell. The US dollar index remained stable, providing some support for precious metals prices.

Looking at the daily chart, gold prices have experienced an overbought correction after a continuous rise, and have fallen back to key support levels in the short term, finding some buying support. If prices stabilize in the $4,000-$4,050/ounce range, bulls may extend the rally to the $4,150-$4,180 resistance zone.

If the correction continues to decline, the support level below will focus on the round number of $4,000. Overall, the short-term technical situation is in the repair phase, and bullish sentiment remains, but attention should be paid to the impact of global trade concerns and news on the Federal Reserve's policies.

Editor's opinion:

Gold's recent pullback reflects a technical correction after a period of sustained gains, primarily driven by short-term profit-taking and cautious trading sentiment. However, in the medium to long term, geopolitical tensions, expectations of currency devaluation, and potential interest rate cuts remain key drivers of gold prices. Wait for the correction to resolve.