War time is inflationary, gold is inflationary, why is gold coming down?

I have not been looking at Gold for quite a while, my last entry on this was Met a person from a Singapore team trading gold dated 28th February 2026. 

At the time, despite there was a sudden jot at the time, I was adamant at the time that gold should be on continuation upward as there was not yet indication of reversal.

It did not manage higher high, only reaching a high of 5,405 before reversing downward. There was still not any indication of trend change.

It fell close to its 55-week moving average at the time, corrected and later pushed through this support last week. While attempting to reached upward, it is now resisted by the same 55-week moving average this week.

As my recollection goes, old is inflationary, and there is a war going on in the middle east, disrupting the oil supply, why then gold is coming down?

To answer this question requires fundamental ability, unfortunately it is not my field of expertise. As for me, I am truly puzzled. 

anyway, gold is going down, meaning that there is no inflation. Next question: will gold be going own further or reversing?

Fig 1. Gold weekly chart

As like the previous up-date, I have not seen divergence of its direction, only confirmation.

Gold has just crossed its 55-week moving average on its down trend. and this week testing this support turned resistance, ending with a Doji uncertainty.

What else o I see? While it is on its continuation downward, its gradient became more gradual, indicative of a reduction in momentum.

At the same time, it just reached its more recent 61.8% projection support level of 4,054, as well as its earlier 127% projection of 3,932. My experience of this support level is a potential correction before continuation. 

Adding to its more gradual downward gradient, I anticipate a reversal upward at this time, retesting its 55-week moving average in the coming week. Should it stay above this level in the coming week, I should see a trend upward in the near future. I should see resistance between 4,263 to 4,705. The later coincides with 38.2% retracement level of 4,656.

If, however, it fails and congest, I will see it to go further downward. The next level of support then should be its more recent 100% projection of 3,556. This also coincides with its earlier 161% projection of 3,523.

What interesting is its MACD, which is fluctuating at extreme level. It normally oscillates at between -74 to 142. However, its recent movement went as high as 524 to a record low of -249. At the same time, I also notice the full length of each bar is much longer, giving the impression of top formation in progress.

I believe Gold may be unstable and fluctuation may be more erratic.

For the time being, I believe reversal upward is of higher probability for gold. 

On a side note, there is another formation. The present 61.8% projection of 4,054 also coincide with the neckline of a potential double top formation, which will result in a minimum objective of 2,628. However, this is quite far-fetched at this point of time. Zig-zag pattern resulting in objective of 3,556 is more probable.

Met a person from a Singapore team trading gold.

 I attended an open house of Singapore University of Technology and Design (SUTD) yesterday.  My son's diploma course is reaching completion, and it is time to again consider the next step in further study.

The university courses focus on strength in science and technology and most of the courses result in at least Bachelor of Science. 

The interesting part is I met a person there who is part of a team of people trading in gold, reason? 

The mentor of the team has multiple years of experience in trading gold, and he guides the team on their trading strategies.

This caught my attention, as gold has appeared on my radar recently when news of gold "crashing". Meeting this person seems to a sign for me to check it out.

My last entry on gold was Gold shot up.... dated 21st April 2024, close to 2 years ago. I was bullish on this counter at the time with estimated objective of 2,527. As gold was not really my interest, I just left it there and then.

It is indeed a surprise that it reached a peak of 5,586 before correcting on 24th January 2026. More than double of my origin target. Where will gold be heading after this correction?

Fig 1. Gold (GC=F) weekly chart

First off, the plunge was strong, a full 1,189 plunge, a drop of 21% in less than 2 weeks. No wonder there is so much yelling at the time, especially from China.

It was however, supported by its 8-week moving average and went on continuation thereafter. while the MACD is very high at a height of 529, there is even a gapped up this week indicating much momentum upward.

Further to that, its movement maintained below its Bollinger envelop, the increment is quite in control.

What is its weakness then?

It is fast reaching its short term 61.8% projection resistance of 5,277.97. It is also getting close to its longer term 61.8% projection of 5,442.51, follows by its 100% projection of 5,538.97. 

It is close to its previous high of 5,586, and the plunge on week o 24th to 31st January 2026 demonstrated a significant level of weakness. Its move after that is milder in comparison, even with its gap up this week. The gap might just be due to exhaustion.

I foresee some struggle for gold in the near future, especially between 5,442 to 5,539. However, I am yet to see any sign of reversal here. It may correct or congest and will go higher base on its present indication. Reason?

Its moving average alignment, which suggest an uptrend continuation.

What is the significance of gold other than an indication o inflation? 

In the past, USD was gold standard, which allow USD to be more stable and stronger. The weakness of this is limitation of its circulation. Things change when the tie was broken and USD floated.

As gold is still traded in USD, it shows weaker Dollar every time gold climbs higher. We should be seeing inflation in place for US of A. This may be made worse with Tariff in place. 

The question now is: Is inflation just a US problem or is it spreading out? 

I will have to check on GBP and EUD which will be done on my next entry.