Diego Colman

Gold prices plunged this week after briefly hitting a fresh record on Monday, sinking more than 3% to settle slightly below the $2,335 mark. The selloff was driven primarily by the rally in short-term Treasury yields following hawkish Fed minutes and better-than-expected U.S. PMI data, which showed that business activity in the services sector accelerated to its strongest pace in over two years in May, a sign that the economy is holding up remarkably well and is able to tolerate higher interest rates for longer.

The new week will start off slowly, as both the US and UK markets will be closed on Monday— the former for Memorial Day and the latter for a bank holiday. Holidays in these financial hubs mean lower trading volume, possibly leading to sluggish price action. But there's a catch: thin liquidity can at times magnify price movements if unexpected news hits the wires, with fewer traders around to absorb buy and sell orders. That said, caution is warranted for those who still decide to trade on Monday.

In this article, we examine market sentiment on the British pound through a detailed analysis of GBP/USD, EUR/GBP, and GBP/JPY. We also assess potential near-term outcomes based on retail sector positioning and contrarian signals.

EUR/USD FORECAST - TECHNICAL ANALYSIS GBP/USD FORECAST - TECHNICAL ANALYSIS Stay ahead of the curve and improve your trading edge! Download our EUR/USD forecast for a thorough overview of the pair’s technical and fundamental outlook.

In trading, the temptation to follow the masses is strong - buying during bullish trends and selling in bearish ones. However, experienced traders often find that the good opportunities come from unconventional strategies. One effective approach is contrarian trading, which involves moving against the dominant mood of the moment to capitalize on potential market shifts.

Gold (XAU/ USD ) has rallied spectacularly this year, hitting an all-time high near $2,450 in early May. The upward momentum, however, has begun to fade, with prices down more than 4% from their recent peak over the past few trading sessions, a sign that bulls are starting to head for the exits, in search of more attractive opportunities.

Gold has rallied spectacularly this year, hitting an all-time high near $2,450 in early May. The upward momentum, however, has begun to fade, with prices down more than 4% from their recent peak over the past few trading sessions.

In trading, the temptation to follow prevailing trends is strong—buying during bullish phases and selling in bearish ones. However, seasoned traders often discover that the best opportunities arise from unconventional strategies. One such method is contrarian trading, which involves going against the dominant market sentiment to capitalize on potential shifts.

Gold (XAU/ USD ) has enjoyed a remarkable rally this year, peaking near $2,450 in early May. However, the upward impetus has recently started to wane, with bullion retreating over 4% from its highs in the past few trading sessions. This price correction suggests a shift in investor sentiment, with bulls likely seeking greener pastures.

In a recent article, I explored a compelling trading idea, discussing the possibility of gold 's recent softness persisting in the near term. I pointed out that a breach of support located around $2,335 could serve as a technical signal for a bearish continuation. On Friday, bullion not only slipped below this region but also fell under its 50-day simple moving average at $2,327.