Gold (XAU/USD) Price Forecast: Downward Pressure Targets 50-Day Support

Bearish Pressure Persists

Downward pressure remained strong in gold on Wednesday, with an early push above Tuesday’s high briefly reaching $4,030. Sellers swiftly took back control, pushing prices into the lower half of the day’s range, where trading continues as of this writing. The low of $3,916 established short-term support, but a drop below it would signal further weakness. Gold appears likely to close in a bearish position within the lower third of the day’s range, reflecting persistent selling momentum.

Potential Bounce to Resistance

A rally to test resistance near the 20-day average at $4,072 remains possible if Tuesday’s $3,886 low continues to hold as support. A move above today’s $4,030 high would indicate an advance toward the 20-day line is in progress. Today’s brief attempt at a daily bullish reversal marks the first pullback to test the 20-day since Monday’s sharp breakdown, which saw a weak close near the day’s low.

Breakdown Significance

Monday’s decline not only fell below the 20-day line but also breached the top rising channel line, with both indicators nearly converging on the breakdown day. This dual failure adds significant weight to the move. With support at the top of the channel now broken, the opposite side of the pattern becomes a potential target. However, the rising dashed centerline is more likely to be tested first as support before the correction concludes.

Lower Support Targets

An initial lower target for gold is the 50-day average at $3,794. As it rises, it will soon converge with the 50% retracement level at $3,846, forming a potential support zone for the current bearish correction. Rallies into this resistance area may be used by traders to exit long positions or enter shorts, maintaining downward pressure until a clear support level proves its strength.

Outlook and Key Levels

The close below $3,916 will be decisive — below it targets the centerline and the $3,794-$3,846 zone, while above it defends the $3,886 low. The 20-day average at $4,072 caps any near-term bounces, but the channel dynamics strongly favor an eventual test of the midline – or at least an approach. Watch for price behavior at support—holding the 50-day average keeps the longer-term uptrend intact, while a decisive break signals a deeper and potentially more prolonged correction. Today’s action reinforces the bearish bias until buyers show sustained conviction.

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