Gold Price Forecast: New High, Deep Pullback, Key Levels

Gold popped to a new record high of $3,168 initially on Thursday, before selling off hard following the new U.S. tariffs announcement. A low of $3,054 was reached for the day before buyers took back control. That low put gold at a five-day low, which is bearish by itself. The high-to-low price range measured a 3.6% decline of $113.84. At the time of this writing, gold continues to trade relatively weak in the lower half of the day’s trading range.

Half of the day’s range is at $3,111. Therefore, a daily close below that price level may be somewhat more bearish than a daily close above it. Also, notice that a top rising parallel channel line (purple) is around the midpoint of the day as well. It recently marked potential support and now possible resistance. But a daily close above the line would fail to confirm the bearish breakdown that triggered earlier in the day.

Bearish Outside Day Established

That may assist for the short-term, but gold established a bearish outside day today. An outside day at the top of a bull trend can sometimes precede a more significant bearish pullback. Gold is therefore more likely to see further consolidation or a deeper decline before it is ready to proceed higher, if that is what happens. In addition to the midpoint of Thursday’s price range, a daily close below Wednesday’s low of $3,104 would provide another small bearish indication of weakening underlying demand.

Bounces off Key Support

Given the wide range day for Thursday, gold could continue to trade within the day’s price range for a few days. Also, keep in mind that today’s large outside day could evolve into a broadening formation on the lower time frames, if not the daily chart. Support was seen today at the previous trend high resistance area from March at $3,058. Given the successful test of support near that price level today, it is possible that the bearish pullback completed a low today.

A retest of a breakout price area following an initial trigger is typical of an advancing trend. And it seems like that may increase the chance for a relatively sideways move, which stays above today’s low. Further down is the key trend indicator, the 20-Day MA, now at $3,022.

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