Gold (XAU/USD) Price Forecast: Rising Wedge Breakdown Pressure Builds

Momentum Stalls Beneath Key Swing Structure

Following a bearish signal in gold earlier in the week, momentum remains stalled above a higher swing low at $4,640. On Friday, a nine-day low of $4,658 was reached, further testing support near that swing low and resistance near several trending indicators that briefly represented potential support. Now those indicators represent resistance, as the past two days are closing below the 20-day moving average, which represents the current low end of nearby trend resistance.

Rising Wedge Breakdown and Short-Term Bias

But as Friday’s session close arrives gold is set to end the second session below the 20-day moving average, now near $4,730. This leaves gold in a bearish position following the decisive breakdown of a rising wedge on Tuesday. Although bearish momentum following the break has been muted, price structure retains a bearish outlook, and the potential of the pattern breakdown remains valid barring a bullish reversal that recovers key nearby resistance zones.

Resistance Cluster Builds Above Price

There can still be a pullback to test higher prior support indicators as resistance before the anticipated decline continues and likely picks up speed. The 50-day moving average marks a key dynamic resistance zone since it was confirmed as resistance at the top of the wedge last Friday. Currently, the 50-day average is at $4,862, a little below the top of the wedge consolidation pattern and the lower swing high at $4,890. Based on the structure, a minor lower swing high at $4,833, a five-day high, provides another level of interest. If it exceeded to the upside, the bearish potential of the wedge becomes suspect.

Weekly Structure Tightens Bearish Signal

Although bearish indications are seen in the daily chart, an inside week will complete this week on the weekly chart, setting it up for a bearish continuation signal below this week’s low of $4,658. However, since the prior week’s low of $4,640 is close by, that level should provide a more reliable bearish signal if it triggers. This proximity of lows creates a layered support zone where a clean break would strengthen downside conviction rather than produce a marginal signal.

Downside Targets Define Broader Path

An initial downside target is indicated in a zone near $4,381, which is validated as both support and resistance over the past, with a trend high in October and a swing low from January. Further down is the significant 200-day moving average at $4,252. Taken together, these levels define a broader bearish pathway that remains intact unless gold can reclaim and hold above key resistance levels noted above.

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