Gold prices (GCUSD: $4,010.5, -3.09%) plunged sharply, marking an 8% weekly drop, the steepest since 2013. The fall follows a powerful 55–60% rally in 2025 driven by inflation and Fed cut hopes. Investors are watching for any forward-looking remarks from Fed Chair Jerome Powell, as it is generally anticipated that the Fed will lower interest rates at the conclusion of its policy meeting on Wednesday.

A strong U.S. dollar (and easing U.S.–China tensions sparked profit-taking If Trump and Xi have a fruitful trade summit this week, gold may find itself somewhat in the dark. Analysts warn gold faces key support near $4,050–$4,000 per ounce; below that, a slide toward $3,700–$3,500 is possible as investors reassess safe-haven bets. Technical factors have amplified the fall. According to analysts cited by the Financial Times, gold now faces critical support around $4,050–$4,000 per ounce. A decisive break below could open the door to deeper losses toward $3,700–$3,500 levels. In contrast, if gold holds above these thresholds, traders expect sideways consolidation as markets seek fresh catalysts.

The market is also closely tracking the upcoming US Federal Reserve policy announcement on Wednesday, which is likely to put further downward pressure on the bullion.The market is also expecting a 25 bps rate cut in the upcoming Fed announcement. Attention is turning to upcoming central bank meetings, with the Federal Reserve widely expected to deliver a 25 basis point rate cut following weak inflation data, while both the ECB and BOJ are anticipated to maintain steady policy stances.