Gold (XAU/USD) Price Forecast: Bearish Breakdown Targets Major Support

Bearish Breakdown Confirms Lower Swing High

Following a new bearish reversal signal on Friday, it looks like gold is heading lower toward a key potential support zone at the confluence of several indicators. On Friday, gold triggered a breakdown below the 10-day moving average and a six-day tight topping range with a low of $4,638. During the formation of that range, resistance was successfully tested near the confluence of the 50-day and 100-day moving averages. The subsequent decisive decline confirmed that resistance and established a lower swing high.

A nine-day low of $4,511 was reached on Friday and a weak closing near the lower third of the day’s range appears likely. An internal downtrend line connecting to the new lower swing high (C) shows an acceleration in bearish momentum relative to the slope of the higher but dominant downtrend line. Given the new bearish signal, a continuation of the larger bearish correction that followed the $5,597 peak in January now appears increasingly likely.

Correction Builds Toward Major Confluence Zone

The new lower swing high begins another leg down in the bearish correction, with a drop below the higher swing low of $4,500 increasing in likelihood. That would provide the next trend continuation signal and put gold in a position to challenge lower potential support levels. The current decline therefore continues to build toward a test of a much more significant support region below, one that could determine whether the broader correction stabilizes or extends further.

As noted above, there is a potentially powerful support confluence zone that starts with the spike low from early-February at $4,401 and ends near the 200-day moving average, now near $4,348. Within that range are other structure levels, the 61.8% Fibonacci retracement of the prior advance at $4,397, an uptrend line, and a prior monthly low. In addition, now that a new lower swing high has been generated, a measured move projects to $4,382, as can be seen by the ABCD pattern shown on the chart. Once the two-downswings match in price, a potential pivot is identified as symmetry is represented between the two swings.

Resistance Levels Remain Clearly Defined

Bounces may test resistance near Friday’s lower daily high of $4,665 and the nearby falling 20-day moving average, now around $4,662. At the same time, the 200-day moving average guards the low end of the range as strong support was seen near it during the sharp selloff in March, confirming it as a key long-trend indicator. That relationship ties back to the broader bearish structure now developing, as gold heads toward a critical decision zone where either renewed demand emerges or the correction deepens further.