Gold has slipped towards critical support near $4,270, but the falling-wedge breakout remains intact. A push above $4,400 would put the next target at $4,511.
Deeper pullback hits support
Gold extended its decline on Wednesday, falling to a daily low of $4,275 and trading near that level late in the session. The drop took the price back below the 50-day moving average, which gold had reclaimed only last Thursday and briefly held as support.
The move is bearish in the short term, but the metal has now reached an important area. It came within a few dollars of a 78.6% Fibonacci retracement of the most recent upswing at $4,270, and it is testing support where a falling downtrend line meets a rising trendline. That cluster of support gives buyers a clear level to defend.
$4,369: the first sign of recovery
The first signal that the pullback is ending would be a decisive move above Wednesday’s high of $4,369. That level matters because the 20-day moving average has capped each day’s highs this week. A break above $4,369 would likely lift gold back over the 20-day average and strengthen the case that the correction has run its course.
Wedge breakout keeps the bullish picture alive
The bigger picture still favours the bulls. On Friday, gold broke out of a falling-wedge pattern, a formation that often comes before a move higher, when it rallied above the pattern’s upper boundary. That breakout followed a bounce from strong support where several technical indicators lined up, leaving a higher swing low at $4,235 last week. As long as that structure holds, the recent weakness looks more like a retest than a reversal.
Above $4,400, the target is $4,511
A rise above last week’s high of $4,400 would confirm the uptrend is resuming. The next upside target would then be $4,511, the initial objective projected from the wedge pattern.
Levels to watch
Support: $4,270 (78.6% retracement), then $4,235 (last week’s swing low)
Resistance: $4,369 (Wednesday’s high and near the 20-day MA), then $4,400 (last week’s high)
Upside target: $4,511
Disclaimer: This article is for general information purposes only and does not constitute financial, investment or trading advice.
