Gold price retreated for ten consecutive days, entering a bear market after falling by over 20% from its all-time high.
It dropped to $4,340 today, March 24, as crude oil prices rebounded and gold ETF outflows continued.
This retreat may continue in the near term, potentially pushing prices toward $4,000.
Crude oil prices are rising as the odds of Fed interest rate cuts fall
Gold has been in a strong downward trend since the outbreak of the war in Iran on February 28.
This retreat occurred as investors sold the news, given that the conflict had already been priced in.
Polls from Polymarket and Kalshi indicated that the odds of an attack were high as Donald Trump assembled his armada near Iran.
The war in Iran has driven energy prices higher this year. After declining on Monday, Brent and West Texas Intermediate (WTI) rebounded on Tuesday, rising to $100 and $95, respectively.
This rebound may continue in the near term, as Iran has denied Trump’s claim that the two countries held talks. The Strait of Hormuz is still closed.
Therefore, there is a likelihood that inflation will remain elevated in the coming months.
A report released last week showed that the Producer Price Index (PPI) jumped to 3.4% in February before the war started.
Another report revealed that the headline Consumer Price Index (CPI) rose 2.4% in that month.
Inflation will likely remain above the Fed’s target of 2.0%, which will make it difficult for the Federal Reserve to cut interest rates this year.
A Polymarket poll shows that the odds of a rate hike have jumped to 20% frm thi month’s low of 8%.
Another poll shows that most traders expect the bank to maintain rates steady this year.
Gold price often does well when the Fed is either cutting rates or when it is shifting to a dovish tone.
Polymarket poll on number of rate cuts in 2026 | Source: TradingView
Gold ETF outflows are accelerating
Gold price is also slumping as American investors continue dumping their holdings.
Data compiled by ETF.com shows that the iShares Gold ETF (IAU) has continued shedding assets.
It has had outflows in the last six consecutive weeks, with most of the outflows happening last week.
The fund shed $1.6 billion last week, bringing the year-to-date net outflows to $2.5 billion.
IAU ETF inflows and outflows | Source: ETF.com
Similarly, the SPDR Gold ETF (GLD) has had outflows in the last three weeks, bringing the year-to-date outflows to over $2 billion.
Notably, the ongoing gold ETF outflows happened at a time when Bitcoin ETFs are adding assets after four consecutive months.
Bitcoin funds have added over $1.6 billion this month, bringing the cumulative net inflows to $56 billion.
As such, this could be a sign of the ongoing rotation from gold to Bitcoin.
Bitcoin ETF inflows | Source: SoSoValue
Gold price technical analysis
The daily chart shows that the XAU price has slumped in the past few weeks.
After peaking at a record high of $5,595 in January, it slumped to a low of $4,098 on Monday and then rebounded to $4,353 today.
Gold has slumped below the Strong, Pivot, and Reverse levels of the Murrey Math Lines tool, confirming that bears remain in control.
It has slipped below the 50-day and 200-day Exponential Moving Averages (EMA).
The Average Directional Index (ADX) has jumped to 25, its highest point since February 13.
A rising ADX figure is a sign that the downtrend is strengthening.
Therefore, the most likely gold price forecast is bearish, with the initial target being at $4,098, its lowest point this week.
A move below that level will point to the Ultimate Support of the Murrey Math Lines tool at $3,750.
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