Gold extended the losses yesterday after breaking below the 4,070 support as widespread risk aversion tightened financial conditions. It looks like gold have been driven mainly by liquidations to cover losses in the stock market, much like what we’ve seen in 2025. To understand the mechanics, imagine that an investment fund holds stocks, gold and government bonds. Some stocks suddenly crash, and the fund suffers losses on leveraged positions. The fund may need to raise cash to meet margin calls, reduce leverage or satisfy investor redemptions. Rather than selling only the assets that caused the losses, it may sell whatever it can liquidate quickly. Gold is particularly useful in this situation because it is highly liquid and can be sold quickly. The main drivers like real yields have been actually pointing to higher gold prices. In fact, real yields fell significantly as inflation expectations remain roughly unchanged given the increase in oil prices, while nominal Treasury yields fell due to growth concerns. This might be an opportunity for the buyers to fade the weakness and enter at better prices.Today, the focus will be on the US Flash PMIs. If the data surprises to the downside, growth concerns will likely intensify, and we should get another dovish repricing. In this scenario, gold should be supported as real yields would fall further. Stronger than expected data, on the other hand, could quell growth fears in the near-term and put renewed pressure on gold. GOLD TECHNICAL ANALYSIS – DAILY TIMEFRAMEOn the daily chart, we can see that gold(CFD contract) extended the losses yesterday after breaking below the 4,070 support. We are approaching a key support zone around the 3,885 level where we have also a major upward trendline for confluence. If the price gets there, we can expect the buyers to step in, with a defined risk below the trendline, to position for a rally into new record highs. The sellers, on the other hand, will look for a break lower to increase the bearish bets into the 3,500 level next.GOLD TECHNICAL ANALYSIS – 4 HOUR TIMEFRAMEOn the 4 hour chart, we can see more clearly the selloff after the price broke below the 4,070 support as more sellers piled in to target the 3,885 level. If we get a pullback before that, we can expect the sellers to step in again around the 4,070 resistance, with a defined risk above it, to keep pushing into new lows. The buyers, on the other hand, will look for a break higher to extend the pullback into the downward trendline next.GOLD TECHNICAL ANALYSIS – 1 HOUR TIMEFRAMEOn the 1 hour chart, we have a minor downward trendline defining the bearish momentum. The sellers will likely continue to lean on the trendline, with a defined risk above it, to keep pushing into the 3,885 support. The buyers, on the other hand, will look for a break higher to pile in for a pullback into the major downward trendline, with the 4,070 resistance as the first target. The red lines define the average daily range for today.UPCOMING CATALYSTSTodaywe conclude the week with the US Flash PMIs. This article was written by Giuseppe Dellamotta at investinglive.com.