Gold Price Plunges 9% Over Two Weeks, Bulls Face Crucial Test

Gold prices have plummeted nearly 9% over two weeks after a sharp reversal from August highs. The decline has brought XAU/USD back to an important inflection point, with bulls needing to regain control and stabilize the current decline to preserve the broader recovery.

The August breakout remains technically viable for now, but momentum has deteriorated since the exhaustion of a three-week rally at 4681. Bulls will need to secure support at 4319 to keep the breakout intact.

Key U.S. inflation data next week, including PPI and CPI readings, could provide the catalyst for the next major directional move in gold prices. A hotter-than-expected inflation report could tip expectations toward additional tightening, fueling a rise in Treasury yields and the U.S. dollar while increasing pressure on gold.