Gold Price Forecast: Holds Above Key Support Amid Ongoing Downward Pressure

Gold consolidated within a range of $2,975 to $3,023 on Tuesday and traded for a second day below the 20-Day MA, now at $3,036. An inside day will complete today reflecting consolidation following a $2.11 or 6.8% decline from the recent $3,168 record high to Monday’s low of $2,956. That drop broke below an internal uptrend line but found support around a prior trend high of $2,955 and the 61.8% Fibonacci retracement at $2,961. And gold remains above the 50-Day MA trend indicator, at $2,937 currently.

Inside Day Consolidation

The inside day pattern may complete as a bearish doji shooting start candlestick pattern. Although that pattern is typically more reliable at market tops, it still reflects sellers being in control for the day, as the day’s closing price is set to be near the lows of the day. Therefore, a decline below $2,975 will trigger a breakdown of the inside day shooting star pattern.

Shows Relative Strength

Gold has held up better than many assets during recent global market volatility as it has only fallen by 6.7% and it remains above the 50-Day MA. Although dropping below the rising trendline and 20-Day MA are signs of weakness, the relationship to the 50-Day line is now key support. If gold remains above the 50-Day MA, it has a chance for the advance to continue. But a decisive decline below the 50-Day line could change that.

50-Day Moving Average Support is Key

Lower potential support levels that are below the 50-Day line, include a 78.6% retracement level at $2,904, a 50% retracement of a larger swing at $2,875, and a prior interim swing low at $2,833. Those price areas can be watched for possible support along with the next lower long-term uptrend line (purple). If the 50-Day MA fails as support, the next trend indicator is the purple uptrend line, and therefore it has a good chance of being reached if gold drops below and then stays below the 50-Day MA.

Upside Breakout Faces 20-Day Moving Average

On the upside, a one-day bullish reversal above today’s high of $3,023 may lead to a test of resistance around the 20-Day MA at $3,036. Then there is Monday’s high of $3,055. Gold would need to trade above and stay above $2,023 before it has a chance to challenge recent highs.

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