Gold (XAU/USD) Price Forecast: Reversal Signals First Pullback After Record Highs

Reversal Follows Test of Pattern Targets

Gold triggered a one-day bearish reversal on Wednesday as price fell below $3,626, triggering a shooting star candlestick pattern. The session established both a lower daily high at $3,657 and a lower low at $3,619. This reversal comes immediately after a test of resistance marked by two rising ABCD pattern targets, completed with Tuesday’s record peak of $3,675.

First Potential Pullback After Breakout

Since the breakout to new record highs on September 2, gold has shown almost uninterrupted strength, with only one prior one-day pullback before momentum quickly resumed. A similar recovery is possible again, but price behavior now suggests the market may be ready for a deeper pullback or consolidation. The advance from the $3,311 swing low to Tuesday’s high represented an 11% gain, or $363, over just 14 trading sessions — a steep rise that increases the odds of further profit-taking before bullish continuation.

Key Support Zones to Watch

The first potential support area sits near this week’s low of $3,576, but if that level fails to hold, the 38.2% Fibonacci retracement at $3,537 is the next key zone. Below that, the prior record high of $3,500 comes into play, coinciding with the 50% retracement at $3,495. A stronger support zone rests lower, spanning the $3,451 and $3,439 swing highs that defined the prior symmetrical triangle pattern. This lower range aligns with the 61.8% retracement at $3,452 and is reinforced by dynamic support from the 20-Day moving average, now near $3,450 and rising.

Bigger Picture Still Bullish

While a pullback appears likely, the broader outlook for gold remains firmly bullish. The first test of the 20-Day average should attract buying interest and help maintain the uptrend. Only a decisive drop and sustained trade below the 20-Day line would weaken the bullish structure as it looks now.

Weekly Close to Confirm Strength

With two trading sessions remaining this week, the closing price for the week may matter. A weekly close back under last week’s $3,600 high would show a failure to confirm the breakout, while a strong close above that level would reinforce the longer-term bull trend.

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