GOLD – A decisive move through base support strengthens signals for further downside continuation
Gold extended its decline on Wednesday as a stronger US dollar intensified selling pressure, driving the metal through the key $4,120/$4,100 support zone, which marks the 76.4% Fibonacci retracement of the $3,942/$4,697 rally and a major psychological threshold.
Recent price action suggests the formation of a temporary base, although recovery attempts remain limited and continue to be capped by the falling 10-day moving average. The metal also remains below the descending trendline drawn from the $4,697 peak, reinforcing the view that the current consolidation phase may precede another leg lower.
A sustained break below the $4,120/$4,100 area is needed to confirm bearish continuation and expose the psychological $4,000 level, followed by the 2026 low at $3,942.
Some caution is warranted, as a rebound and repeated closes back above $4,120 could signal a false downside break. However, sellers are expected to retain control while prices remain below the descending trendline at $4,190.
Only a decisive recovery and close above $4,230, the top of the recent trading range and the previously broken 61.8% Fibonacci retracement level, would weaken the bearish outlook and provide an initial indication that a bottom may be forming.
Res: 4144; 4190; 4230; 4266
Sup: 4066; 4021; 4000; 3960
