Gold Analysis – Corrective Decline to $4400 Backed by Harmonics and Momentum Divergence

Gold remains entrenched in a broader bullish cycle; however, current price behavior strongly suggests that the market is undergoing a technically required corrective phase. Despite ongoing short-term advances, momentum deterioration, harmonic completion risk, and higher-timeframe structural constraints increasingly favor a controlled decline before trend continuation becomes sustainable. This analysis outlines the key technical signals and price zones indicating that the current advance is corrective in nature and that a reset toward lower support is the more probable near-term outcome.

Harmonic Structure and Corrective Alignment

On the hourly timeframe, Gold is currently displaying a short-term bullish push into a well-defined resistance zone between $5,220 and $5,290. While price action remains constructive on the surface, momentum indicators are already signaling exhaustion.

Price action continues to respect a developing AB=CD harmonic formation on the hourly chart. Completion of this pattern is expected to act as a technical trigger for downside continuation.

Importantly, the harmonic completion also aligns with a broader ABC corrective structure, reinforcing the view that the current advance represents a counter-trend move rather than the start of a new impulsive leg. Once the harmonic pattern completes, probabilities favor a renewed decline within the ongoing corrective phase.

A clear bearish RSI divergence has developed: the most recent price high at $5,074 was accompanied by a lower RSI peak compared to the previous high near $5,042. This divergence suggests weakening upside momentum and increases the probability of a corrective move emerging from resistance.

Support Zones and Structural Targets

Zooming out on the hourly structure highlights a strong confluence of dynamic and static support clustered in the $4,440 – $4,380 region. This zone has repeatedly acted as a reaction area and remains the most technically coherent downside target for the current correction.

In addition, the dynamic resistance originating from 28 October 2025 is now acting as a technical ceiling, positioning this area as a potential launchpad for the next major directional move once the corrective decline is complete.

Higher Timeframe Context: Parabolic Structure and Moving Average Support

On the weekly timeframe, Gold continues to trade within a parabolic advance, largely ignoring traditional RSI constraints. While such behavior is uncommon, it is not unprecedented during late-stage cycle extensions, where momentum remains elevated despite overbought conditions.

On the daily chart, this parabolic structure is reinforced by the 100-day Simple Moving Average, which has consistently acted as dynamic support. The technical setup suggests that price is unlikely to sustain separation from this moving average and that a revisit toward the $4,400 area remains statistically favored before the broader uptrend can resume.

Macro and Event Risk Considerations

From a macro perspective, U.S. Retail Sales and Core Retail Sales data are expected to influence the U.S. Dollar Index in the near term and may introduce short-term volatility in Gold.

However, the primary macro risk driver remains geopolitical developments in the Gulf region, particularly surrounding Iran–U.S. relations. These factors retain the potential to accelerate or delay technical outcomes but do not currently invalidate the broader corrective framework.

Final Remarks

Taken together, Gold appears to be navigating a technically mature corrective phase within a broader bullish cycle. Harmonic completion, bearish momentum divergence, structural resistance, and higher-timeframe moving average confluence all point toward an increased probability of a controlled decline toward the $4,400 region before the next sustained upside leg unfolds.

As with all cycle- and structure-based analyses, this framework remains probabilistic rather than predictive. Confirmation through momentum expansion or invalidation via sustained acceptance above resistance should be closely monitored as price approaches key inflection zones.