Gold (XAU/USD) Price Forecast: Sellers Dominate After 200-Day Breakdown

Breakdown Extends Below Key Support Zone

Gold triggered a continuation of the bearish trend on Friday, falling below the prior low of $4,314 and accelerating to the downside. Sellers took full control at that point, and they remained in control throughout the session. At the time, trading remains near the lows of the day, and the session looks likely to close in a similarly bearish position. The decline also showed a break of support near the 200-day moving average and further confirmed the failure of support at the uptrend line on Wednesday. This behavior suggests that sellers may remain in control during Monday’s session.

Long-Term Trend Pressure From 200-Day Breakdown

Failure of support at the long-term 200-day moving average trend indicator has the potential to lead to a more significant bearish correction than what has occurred to date since the January peak of $5,597, or to a recovery driven by the formation of a higher swing low. The next lower target zone is defined by the 78.6% Fibonacci retracement of the prior advance at $4,262. That looks to be the next decision point where buyers may step in to push price higher. If that occurs, it could result in a higher swing low and an eventual reclaim of the 200-day average.

Fibonacci Support Test and Downside Continuation Risk

If the 78.6% retracement zone fails as support, the higher swing low from March at $4,091 becomes the next downside target, followed by a long-term uptrend line that connects to the December 2024 swing lows. That line has not been tested as support since it was drawn. Depending on when it is reached, the trendline may mark a price zone that is above the March low.

Resistance Zones Within a Weak Trend Structure

Bounces before the 78.6% retracement is reached would be within a downtrend and therefore likely to encounter resistance and turn back down. The prior low at $4,366 is a key level along with Thursday’s low of $4,423 and the 200-day moving average at $4,433. There is also Friday’s lower daily high near $4,482 and the lower weekly high at $4,546.

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