Gold Price Forecast: $4,381 Peak Sparks Caution as Traders Eye $4,000
Gold prices were headed for their steepest daily fall in five years, following a huge spike earlier this week to an all-time high of $4,381.
Quick overview
- Gold prices are experiencing their steepest daily decline in five years after reaching an all-time high of $4,381.21 earlier this week.
- Traders are eager to secure profits ahead of the upcoming CPI report, which is anticipated to show a 3.1% year-on-year inflation increase.
- Currently, gold is trapped in a bearish channel with resistance at $4,125 and support at $4,009, indicating short-term bearish sentiment.
- A potential reversal could occur if gold forms a double bottom near $4,009, while a drop below $4,000 may target $3,906.
Gold prices were headed for their steepest daily fall in five years, following a huge spike earlier this week to an all-time high of $4,381.21. This surge has pushed the price nearly 60% higher in 2025, thanks to a combination of expectations for US interest rate cuts, safe-haven demand that refuses to let up, and central banks buying the metal. And now, traders can’t wait to lock in their profits before this Friday’s CPI report, which is expected to show a 3.1% year-on-year rise in inflation.
According to metals trader Tai Wong, not working for any big bank or fund, the recent wild price swings near the highs are giving traders pause. “Just yesterday we were buying every dip, but now we’re seeing warning signs flashing everywhere,” he said.
Gold (XAU/USD) Price Structure Uncertain – Consolidation Imminent
Technically, gold (XAU/USD) is still stuck in a bearish channel, its price stuck near $4,075. The metal has been capped by its 20-day EMA since the big peak at $4,270 on October 21st; every rebound effort since then has failed to break out. Look at the pattern—we’ve got lower highs and lower lows across the chart; that’s a pretty clear sign of bearish sentiment in the short term.
But here’s the thing, momentum is starting to fade a bit. The RSI is at 43, suggesting that selling pressure might be easing a bit and that gold could be due to stabilize around key levels.
Key Levels to Keep an Eye On
- Resistance $4,125 (a minor neckline ) and $4,201 ( the 61.8% Fib level)
- Support: $4,009 (the channel base ) and $3,906 (the 1.618 Fib extension level)
- EMA Structure: 50-day EMA remains above the 20-day EMA, which means the downtrend is still in place
Potential Trade Setup
Now, if you are a trader, you might be wondering what’s on the cards. Well, a big reversal setup could emerge if gold forms a double bottom or bullish engulfing pattern at or near $4,009, and ideally along with some RSI divergence to boot! A break above $4,125 would be a sign of renewed momentum, and we’d be looking to hit $4,201 and later $4,270.
But, on the flip side, if prices do slide below $4,000, then the next downside target is likely to be near $3,906, the 1.618 Fibonacci extension level. All in all, gold is in a corrective phase, still trending, but buyers are no doubt waiting for that momentum trigger to get in on the action.
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