Gold (XAU/USD) Price Forecast: Adrift Within Consolidation Pattern

Under Pressure

Gold weakened further on Tuesday as Monday’s low of $3,341 was breached, reaching a low of $3,331 for the day. The session is set to close as a narrow-range day, with a high of $3,359 marking a successful test of resistance near the 20-Day MA, now at $3,356. This level, along with the 50-Day MA just above, is now showing a zone of potential short-term resistance.

Monday’s decline also pushed the metal decisively below both the 20-Day and 50-Day moving averages, closing beneath them for the first time in two weeks — a sign that momentum has shifted in favor of sellers, at least in the short term.

Lower Swing High Adds Pressure

A lower swing high was established last week at $3,409, a minor bearish development that raises the probability of further weakness toward the triangle’s lower support zone. This lower swing high reinforces the view that sellers are gaining traction, though not yet strong enough to force a breakdown. Until gold breaks out of the formation, trading is expected to remain choppy, with limited follow-through in either direction as market participants await a decisive move.

An upside breakout would be signaled by a rally through the top boundary of the pattern, confirmed on a move above $3,439, while a close beneath the lower boundary would trigger a bearish breakdown signal, confirmed below the recent swing low of $3,268.

Bias Still Favors Upside Breakout

Despite short-term weakness, the broader technical structure continues to favor an eventual upside breakout of consolidation. This view is supported by the location of the symmetrical triangle near the highs of a long-term uptrend and generally bullish readings across multiple time frames. Moreover, the pattern has developed after a strong rally earlier this year, which often serves as a continuation formation. Still, a weekly bearish signal was triggered this week when gold fell below last week’s low of $3,345, keeping downside risks alive.

Key Support Levels to Watch

From a longer-term perspective, gold recently reversed higher after testing the 20-Week MA two weeks ago, forming a higher swing low on the daily chart. The 20-Week MA, now at $3,310, lies close to the lower boundary of the triangle, reinforcing it as a strong potential support area. A sustained hold above this zone would likely encourage renewed buying, while a decisive drop lower could shift the focus toward the recent swing low at $3,268. A move below that level would confirm a bearish breakdown and open the way for deeper retracements, possibly toward $3,210 – $3,200.

For a look at all of today’s economic events, check out our economic calendar.