Gold (XAU/USD) Price Forecast: Consolidates Near Record High, Pullback Risk Rises

Gold Consolidates Near Record Highs

Gold consolidated on Thursday within a narrow two-day range near record highs of $3,675. A slightly lower low at $3,613 was established along with a lower high at $3,649. This marks the second consecutive session of lower daily highs and lows, coming immediately after Tuesday’s bearish shooting star candlestick pattern triggered.

Resistance Confirmed at Measured Moves

An upside target zone was reached this week, where resistance developed. Two measured moves completed at that level, highlighted as rising ABCD patterns on the chart. The bearish response that followed indicates the market recognized the zone. Despite the reaction, underlying buying pressure remains evident as gold continues to hold near record highs. Still, the shooting star trigger and consecutive lower highs and lows highlight the potential for a deeper pullback before buyers reassert control.

Key Levels on a Pullback

A decline below Thursday’s low of $3,613 would signal a continuation of the pullback. If sellers remain in control, the 38.2% Fibonacci retracement at $3,537 serves as the first lower target. The prior trend high at $3,500 may also be retested as support if weakness extends further, reinforced by a 50% retracement level at $3,495. Together, these levels illustrate a critical support zone that traders will be monitoring closely.

Role of the 20-Day Moving Average

Gold has yet to see a meaningful retracement since breaking out of its symmetrical triangle and surging to fresh records. Typically, the first pullback after such a breakout attracts strong demand as participants look for entry opportunities. A decline toward the 20-Day moving average remains possible, now at $3,465 and rising. The most recent acceleration in bullish momentum began with a successful reclaim of the 20-Day average on August 22, and even if not imminent, a test of support around the line is likely at some point in the trend’s development.

Weekly Breakout in Play

Despite near-term bearish signals, gold is on track to finish the week above last week’s high of $3,600. Such a close would confirm the weekly breakout triggered earlier this week and underscore ongoing underlying demand. A decisive advance above the $3,675 record high would reinstate bullish momentum and open the door to higher targets, beginning with the $3,734 price zone.

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