Gold Price Falls 3%—Will $3,298 Spark a Comeback Rally?

Gold’s historic rally hit the pause button midweek, falling 3% from its all time high of $3,500. The move came as investor sentiment shifted back to risk on following signs that the US and China may be easing tensions. President Donald Trump sounded more constructive on trade and backed Federal Reserve Chair Jerome Powell. That’s a good combo for the market and equities and the US dollar which are both negative for gold.

US Treasury Secretary Scott Bessent said rolling back tariffs is a precondition for meaningful talks to resume. Result? A dip in safe haven demand and gold fell to $3,298.

Still gold is one of the best performing assets of 2025 up 26% ytd thanks to central bank buying, macro uncertainty and steady institutional flows.

Technical Picture: Gold Holds Key Support at $3,298

After the big reversal from $3,500 gold found support at $3,298. This zone is where the 50 period EMA and the ascending trendline on the 4 hour chart meet so it’s a key technical area.

Momentum indicators suggest the worst of the selling may be over for now. The MACD histogram which had turned very negative is flattening. Not a buy signal but a sign of fading bearish pressure.

Key Levels to Watch:

• Support: $3,298

• Resistance: $3,386 and $3,444

• Breakdown risk: Below $3,260

Ole Hansen head of commodity strategy at Saxo Bank said the reversal could lead to a deeper correction but as long as gold holds above $3,260 the trend is still in buyers hands.

Trade Setup: Recovery Play or Deeper Pullback?

For traders gold’s current behavior sets up a classic “watch and wait” scenario. The $3,298 zone has been defended so far. If that continues a rebound to $3,386 or even $3,444 could follow.

Suggested Trade Plan:

• Buy Entry: On bullish candle close above $3,298

• Target 1: $3,386

• Target 2: $3,444

• Stop Loss: Below $3,260On the other hand if $3,260 breaks the technical outlook turns bearish with the next target at $3,204.

Conclusion

Gold’s pullback is just a temporary shift in risk on not the end of the trend. Geopolitical tensions are still hot and central bank buying is still strong. The $3,298 level is key. If bulls hold the line this may just be a pause not a reversal.

As always confirmation matters. Let price and volume tell the next chapter.