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Gold Price Prediction Update: Gold prices could witness a significant decline in the coming days. According to a recent World Gold Council report, if gold breaks the support level of $3,857 per ounce in the international market, it could undergo a major correction.

The report states that in such a scenario, the next major support level for gold would be $3,500 per ounce, representing a steep drop of approximately 37% from its all-time high of January 2026.

Market focus is on these key support levels

According to the World Gold Council, gold prices are currently trading within a specific range, but there are some critical levels visible on technical charts:

Scope for immediate decline: If gold falls below $3,943 per ounce, a new phase of decline could begin. The next key support level would then lie between $3,857 and $3,887.

A major drop of up to 37%: If the $3,857 level is breached, gold could slide directly to $3,500 per ounce. Historically, previous major downtrends in gold have seen similar declines (around 37%), after which a strong base was established.

At the time the report was released, gold was trading at approximately $4,063.80 per ounce. According to the London Bullion Market Association (LBMA), gold prices fell by 1% last week, and the metal has recorded a decline of 7.8% so far this year.

A strong Yen and weak Dollar could offer relief

Amidst this ongoing decline in gold prices, the Japanese Yen offers a glimmer of hope. The Yen has strengthened due to the first coordinated intervention by the US and Japan in the currency markets.

How will gold find support? The WGC believes that if the Japanese yen continues to strengthen and the US dollar weakens against it, gold prices could find support at lower levels.

**Impact of Fed Interest Rates and US-Iran Tensions**

Gold's price movements are also being significantly influenced by the US Federal Reserve's monetary policy and the global geopolitical climate. The US Federal Reserve recently kept interest rates unchanged. If the manufacturing and services PMI data scheduled for release this week come in strong, expectations for a hawkish stance from the Fed will rise, potentially keeping gold under pressure.

Tensions between the US and Iran have fueled concerns regarding crude oil prices and inflation. However, Trump's announcement of new talks has signaled a slight easing of tensions, which could somewhat alleviate concerns about interest rate hikes.

Additionally, shifting investor sentiment has led to a decline in inflows into gold ETFs and a reduction in net long positions on COMEX.

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