Gold (XAU/USD) Price Forecast: Three-Day Consolidation – Breakout Decides Next Move

Chart Action

Gold consolidated on Friday, testing support around the 20-day moving average with a low of $4,044, mirroring Wednesday’s bounce off the average. The top line of a short-term rising channel saw a brief breach but no close below it. Today’s likely bull hammer candlestick, echoing Wednesday’s pattern, signals buyers defending this key level after Tuesday’s sharp drop.

Support Levels

The 20-day average, now at $4,056, anchors support, with the channel line adding weight. The 10-day average at $4,185, once dynamic support, now acts as resistance, as seen Wednesday. Holding $4,044 keeps the bullish structure intact, but a break below risks a deeper correction.

Trade Setup

A rally above Wednesday’s $4,161 high would trigger a bullish reversal from the three-day range, targeting higher prices within the $4,080-$4,375 zone. The 61.8% Fibonacci retracement at $4,237 and 78.6% at $4,300 are key levels, with $4,381 record high in sight if bulls dominate. A counter-trend bounce off support post-Tuesday’s selloff aligns with the channel’s validation.

Risks Ahead

Muted volatility could form a bear flag if the three-day range expands. A drop below $4,044 signals weakness, breaking the 20-day average, while sub-$4,003 confirms a stronger bearish move. With only one corrective leg so far, a bounce to a lower high could be followed by a second leg down.

Outlook

The $4,056 close decides—above $4,161 fuels a $4,237 push, below $4,044 eyes $4,003. The hammer and channel support favor bulls, but $4,185 resistance may cap rallies. Watch for breakout strength or consolidation — $4,381 remains possible if momentum holds, but a bear flag warns of lower tests of support.

For a look at all of today’s economic events, check out our economic calendar.