Gold Futures Face Headwinds as Ukraine Peace Talks Progress, Technical Reversion Looms
Gold futures are encountering increasing bearish pressure as optimism surrounding potential breakthroughs in the Russia-Ukraine conflict coincides with signals of exhaustion among investors, according to a new analysis of market movements. The precious metal, which has enjoyed a significant rally in recent months, may be poised for a correction as geopolitical risks appear to ease and profit-taking becomes more prevalent.
After opening lower on Monday, gold futures traded at $4529.10 after fluctuating between a low of $4502 and a high of $4556.30. This price action suggests the beginning of a shift in sentiment, analysts say.
Trump-Zelensky Meeting Sparks Cautious Optimism
The shift in sentiment follows a meeting on Sunday between U.S. President Donald Trump and Ukrainian President Volodymyr Zelensky in Florida, where both leaders expressed positive views on the possibility of de-escalating the conflict. However, significant doubts remain regarding the viability of any potential agreements.
“Though two presidents sound very positive, there are still doubts about the evidence of progress,” one analyst noted. A key sticking point remains the question of territorial concessions Ukraine might have to make in exchange for a peace agreement. Even with President Zelensky’s assertion of “100 per cent” agreement on U.S. security guarantees, the specifics of those guarantees remain unclear.
Furthermore, there is little confidence that Russia will accept any deal brokered by Zelensky and Trump. The Kremlin has already dismissed previous proposals, including a ceasefire and the deployment of a multinational monitoring mission. “If Russia says no again, does this mean the US and Ukrainian negotiators are back to square one?” the analysis asks, adding that Trump’s past actions suggest he is unlikely to shift pressure away from Ukraine.
“Acrophobia” Among Bulls and Potential for Profit-Taking
Despite the optimism from both presidents, the prospect of lasting peace remains distant. This, coupled with the substantial gains already realized in gold, is creating a sense of caution among investors. The analysis points to what it terms “acrophobia” among the bulls – a reluctance to push prices higher when they have already reached an extremely high level.
Gold has surged approximately 37.90% in the last 131 sessions, rising from $3313 on August 19, 2025. This rapid ascent has created conditions ripe for a correction, particularly as investors consider year-end profit-taking. A positive development in the geopolitical situation could further accelerate a selling spree.
Technical Analysis Points to Potential Reversion
Looking at technical indicators, the analysis suggests a potential reversion to $3913. This would represent a technical correction after gold’s substantial gains, acknowledging that the metal has largely fulfilled its role as a safe-haven asset. “Further upward move requires revaluation at this stage,” the analysis states.
Key support levels to watch include the 9-day Exponential Moving Average (EMA) at $4432.51. A breakdown below this level could trigger a test of the 20 EMA at $4340, followed by the 50 EMA at $4182 and the 100 EMA at $3971.67. The analysis suggests that a year-end correction could begin as early as this week.
Investors are advised to exercise caution and manage risk when considering positions in gold, as this analysis is based solely on observations of market movements.
