The daily chart of XAU/USD shows that the Average Directional Index (ADX) has reached its lowest level since the beginning of 2025, indicating a significant decline in gold price volatility.

Yesterday’s release of the US Producer Price Index (PPI) initially triggered a sharp spike in gold prices, but the gains were short-lived, with the price quickly reverting to previous levels. This price action aligns with a broader market narrative of equilibrium—where supply and demand are in relative balance, and the market appears to be efficiently pricing in key influencing factors, including geopolitical tensions and tariff-related developments.

However, this fragile balance may soon be disrupted.

Technical Analysis of XAU/USD

From a broader technical perspective, gold remains within a long-term ascending channel (highlighted in blue) in 2025. Key observations include:

→ Attempts to rebound from the lower boundary of the channel (marked with arrows) lack conviction. Bulls are not capitalising on these opportunities to reignite the uptrend, suggesting a potential exhaustion of buying interest.

→ A trendline drawn across the major highs of 2025 has proven to be a strong resistance level. All recent breakout attempts have failed at this barrier.

As a result, the XAU/USD chart is showing signs of forming a large-scale triangle pattern, with its axis centred around the $3,333 level. If bulls continue to falter in extending the multi-month rally, it could encourage bears to challenge the lower boundary of the ascending channel, increasing the risk of a downside breakout.

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