- Gold struggles below key levels as traders rotate to bullish crypto and risk assets.
- Fed rate outlook and easing geopolitical fears reduce safe-haven demand for gold.
- Technical signals warn of deeper gold correction if $3,200 and $3,080 fail to hold.
Gold prices took a notable downturn this week, prompting speculation about a potential shift in market dynamics. While the precious metal often acts as a hedge during economic and geopolitical turmoil, recent developments suggest a waning demand for safe-haven assets. This comes as risk assets, notably Bitcoin and altcoins, experience renewed bullish momentum.
Analysts now question whether this marks the beginning of a broader bull market in crypto and a correction phase for gold. With gold struggling to hold key support levels and investors rotating toward riskier assets, the market appears poised for a significant shift in sentiment.
Gold Slips After Liquidity Grab, Key Levels Under Pressure
According to analyst Michaël van de Poppe, gold has recently grabbed liquidity above two major highs, potentially trapping bullish traders. This move could signal a breakdown rather than a breakout. To regain strength, gold must reclaim and maintain a price above $3,365. Failure to achieve this could confirm a bearish reversal.
If prices fall below the $3,325 level, it could trigger a continuation toward $3,200. This support zone aligns with higher timeframe levels and could temporarily stabilize the decline.
However, breaching this level would reinforce a pattern of lower highs and lower lows hallmarks of a confirmed downtrend. The next key area to watch is $3,080, which could mark the start of a longer-term correction.
Interesting, Gold breaks downwards and #Altcoins and #Bitcoin break upwards.
— Michaël van de Poppe (@CryptoMichNL) June 20, 2025
The start of the bull?
I'd like to see Gold break sub $3,325 as that would confirm erasing this trend and more downwards momentum to come. pic.twitter.com/pli6MIpZam
Federal Reserve Cues and Geopolitical Calm Weigh on Gold
According Reuters report, the recent decline in gold prices follows the Federal Reserve’s decision to hold rates steady at 4.25% to 4.50%. However, the Fed also adjusted its forecast, indicating fewer rate cuts ahead due to growing economic uncertainty. As a result, the U.S. dollar climbed 0.5% this week, making gold more expensive for foreign buyers and reducing its appeal.
Commodities strategist Nitesh Shah suggests that easing concerns over immediate U.S. involvement in the Israel-Iran conflict may also be relieving market anxiety. This, in turn, is allowing gold prices to cool. President Donald Trump has indicated a two-week period before deciding on any military response, adding a sense of temporary calm.
Profit-Taking and Resistance Zones Cap Gold’s Rally
Ole Hansen, head of commodity strategy at Saxo Bank, attributes part of gold’s weakness to profit-taking after the latest FOMC meeting. He expects gold to remain in a consolidation phase, with immediate support near $3,320 and stronger support at $3,245.
