Gold (XAU/USD) Price Forecast: Aggressive Selloff Signals Correction Start

Sellers Dominate Post-Peak

Gold faced heavy selling pressure on Tuesday, tumbling from Monday’s record high of $4,381 – barely topping Friday’s $4,379 peak. The drop smashed through the prior five days’ lows, setting sights on the 20-day moving average at $4,001. Sellers hold firm as of this writing, with prices stuck in the lower quarter of the day’s range, likely closing at a four- or five-day low – a distinctly bearish shift.

Breakdown and Support Test

The decline breached the 10-day average at $4,154, and a daily close below this line would confirm the breakdown, signaling deeper correction potential. Last week’s low at $3,994 anchors an eight-week pattern of rising weekly highs and lows, intact if this week avoids dipping below it despite today’s higher weekly high. A test of the 20-day average could occur without breaking this pattern, preserving the broader bullish structure.

Correction Looms

Today’s aggressive selloff, marked by a wide red range, suggests downward pressure won’t fade quickly. Rallies into this range may hit resistance, resolving lower as the wide range mimics consolidation-like chop, where follow-through falters. The recent surge in gold could spark short-term rallies from late buyers, but the short-term trend shows wear after relentless gains, hinting at a needed breather.

Healthy Pause

While the intermediate and long-term uptrends remain solid, today’s action flags short-term fatigue. A correction would help gold digest its rapid ascent, setting up for the next climb. Price behavior near $4,001 will reveal if support holds or deeper weakness emerges.

Outlook: Watch Key Levels

Sellers are steering, with $4,001 as the next test – hold it to keep weekly patterns alive or break it for a sharper pullback. A close below $4,154 confirms bearish control, while rallies may stall near today’s range. Monitor early correction days for clues—$3,994 preservation signals resilience, but momentum leans bearish until support proves firm.

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