Gold (XAU/USD) Price Forecast: Bearish Structure Tests Key Support Zones

Key Support Under Pressure at Long-Term Levels

Downward pressure was seen in the price of gold on Wednesday, as it fell to a lower daily low of $4,426 and tested support once again near the 200-day moving average. It looks likely to hold above that dynamic trend indicator for now, since the session is on track to close above it. Nonetheless, the session shows a continuation of the bearish trend, with price set to close below the uptrend line for the first time and at its lowest daily closing level since late-March.

Long-Term Trend Risk Intensifies

These additional signs of weakening put long-term support indicated by the 200-day moving average at greater risk of failure in the near-term. It clearly marked a support zone during the sharp decline in March, given the bullish reaction that followed. That was the first time it was tested as support since February 2024, and historically the first retest after a prolonged uptrend often produces a bullish reaction.

Downtrend Structure Points to Lower Targets

Other than the potential support zone near the uptrend line and 200-day moving average, gold is in a downtrend correction that has established a series of lower swing highs and lower swing lows since it peaked in January at $5,597. The projection of that trend would lead to another test of support near the $4,091 price zone. Since it currently aligns with another long-term uptrend line, it takes on added significance as a potential support zone. However, a decisive decline below the short-term trend low of $4,366 points toward the next downside target zone near the 78.6% Fibonacci retracement at $4,262. That price area will soon be joined by the rising 50-week moving average, now at $4,229.

Conditions for Stabilization or Reversal

Despite the potential for a bearish continuation, key support has held so far, and it may continue to do so, which would instead open the door to a corrective bounce and potential bullish reversal signals. That could result in a bounce and eventual bullish reversal signals. Gold has been falling since the lower swing high of $4,891 was established in April. But the decline has been relatively slow, with ongoing signs of consolidation rather than impulsive selling.

Short-Term Resistance Levels Define Recovery Threshold

Strength would first be indicated on a rally above Wednesday’s high but with little conviction. That leaves the three-day high of $4,546 as a short-term resistance that might provide an early warning for a potential breakout above the lower swing high of $4,595, which would represent a more meaningful bullish confirmation as it would also coincide with a reclaim of the 20-day moving average.