Key Takeaways:
Key Price Levels:
Gold prices remained under pressure to end the week, settling below the 20-day moving average for a second straight session as a technical breakdown signals the potential for a deeper correction. The precious metal reached a nine-day low of $4,658 on Friday, further confirming a bearish outlook that emerged after a decisive breakdown from a rising wedge pattern earlier in the week.
The structure of the market retains a bearish outlook, and the potential of the pattern breakdown remains valid barring a bullish reversal that recovers key nearby resistance zones, according to analysis of recent price action. While downside momentum has been muted since the initial break, the close below the 20-day average, now near $4,730, reinforces the negative sentiment.
Following the wedge breakdown on Tuesday below $4,737, support was initially seen around the 20-day moving average before it gave way on Thursday. Key resistance is now established by the 50-day moving average near $4,862, a level that capped the top of the wedge pattern. A minor swing high at $4,833 provides another level of interest; a move above that level would begin to call the bearish scenario into question.
The breakdown puts lower price targets into focus for traders. An initial downside target is indicated in a zone between a February low of $4,402 and a prior trend high from October at $4,381. Further below lies the significant 200-day moving average, currently near $4,252, which previously acted as clear support for the March low of $4,099 and is anticipated to do so again. A break below the prior week's low of $4,640 would provide a more reliable bearish signal and strengthen downside conviction.
This article is for informational purposes only and does not constitute investment advice.
