Gold continues to attract traders’ attention as recent price action confirmed the breakdown of a key secondary ascending trendline, signaling a potential shift in short-term momentum. In this analysis, we simplify the technical picture across multiple timeframes, highlight the confirmed Head and Shoulders formation, and outline the next crucial levels that may guide traders in the coming sessions.
For visual reference, please review the detailed chart included below, which
reflects the latest gold movement and the identified formations discussed in
this report.
Full video analysis:
Watch on YouTube.
1. Technical Overview
Gold’s recent movement confirmed a technical breakdown from a secondary ascending trendline that had been in play since September. The break initiated a bearish shift, later confirmed by the completion of a Head and Shoulders pattern on the 4-hour timeframe — a classic reversal signal indicating a possible continuation toward lower levels.
While the short-term structure is bearish, the monthly chart remains strongly bullish. Gold continues to trade above its primary long-term trendline that originated in 2001–2005. This suggests that long-term investors still operate within a broader uptrend, with no significant risk unless the metal falls below $3,300.
2. Chart Analysis (4-Hour Timeframe)
The chart reveals several critical technical features:
- Left Shoulder, Head, and Right Shoulder form a clearly defined Head and Shoulders pattern.
- The Neckline (red dotted line) broke around $4,027, confirming a bearish breakout.
- The blue ascending trendline near $4,055 was breached, adding further downside confirmation.
- A short-term support developed near $3,886, acting as an immediate pivot area for traders.
Chart Interpretation:
The chart shows gold breaking below its short-term uptrend (blue line) and the
neckline of a Head and Shoulders formation (red dotted line). This confirms a
bearish reversal pattern targeting $3,633, while the extended structure
— a Bump and Run Reversal Top — points toward a potential range between
$3,402–$3,326. These zones act as critical support areas where price
reactions may occur.
3. Support, Resistance, and Pivot Levels
The following levels were calculated using the Pivot Point – Support & Resistance Calculator. These levels provide a data-driven reference for traders to identify key reversal zones and potential turning points.
| Resistance 3 (R3) | $4,154 |
| Resistance 2 (R2) | $4,096 |
| Resistance 1 (R1) | $4,055 |
| Pivot Point (P) | $4,027 |
| Support 1 (S1) | $3,886 |
| Support 2 (S2) | $3,633 |
| Support 3 (S3) | $3,402 |
Note: All numerical values are approximate and derived using the official Pivot Point – Support & Resistance Calculator linked above.
4. Short-Term Scenarios (Traders’ Perspective)
For short-term traders focusing on 4-hour and daily timeframes:
- As long as gold remains below $4,055, bearish momentum is dominant and the path toward $3,633 remains active.
- Breaking below $3,886 would likely accelerate selling pressure toward $3,400.
- A daily close above $4,096–$4,154 would invalidate the bearish structure and potentially trigger a recovery move.
These levels can be re-evaluated dynamically using the calculator tool mentioned above to stay aligned with intraday volatility changes.
5. Long-Term Outlook (Investors’ Perspective)
Despite short-term weakness, gold maintains a solid long-term bullish bias. The primary ascending trendline that originated over two decades ago continues to hold, keeping the larger uptrend intact as long as gold trades above $3,300. This long-term structure supports the view that current declines represent a corrective phase within a broader bullish market.
Such corrections often present new accumulation opportunities for long-term investors seeking exposure to gold as a hedge against macroeconomic uncertainty.
6. Key Takeaways
- The break below $4,055 confirmed a short-term bearish shift.
- The Head and Shoulders pattern targets $3,633, with extended downside potential toward $3,402–$3,326.
- Short-term traders should monitor $3,886 as immediate support; a drop below could trigger further selling.
- A move above $4,154 would invalidate the bearish pattern and restore a positive short-term outlook.
- Long-term investors remain structurally bullish above $3,300.
7. Conclusion
Gold currently navigates a technical correction phase characterized by a broken trendline and completed reversal structures. While short-term momentum points lower, the long-term outlook remains constructive as the primary uptrend continues. Traders should manage positions carefully, using key resistance and support levels as strategic reference points for decision-making.
🎥 Optional: Watch the Original Arabic Video
This video is the original Arabic version of the analysis presented above. The current article provides the complete English summary for international readers.
Disclaimer: This analysis is provided for educational and informational purposes only. It does not constitute financial advice or investment recommendations. Always conduct your own research or consult a licensed financial advisor before making trading decisions.
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