Gold Price Forecast: Will Channel Breakdowns Sink Gold Price Levels Under $4,350?

Quick overview

Gold’s spot price has suffered a major technical breakdown, with the asset plummeting to $4,393.12 amid a precipitous 1.66% liquidation event. The safe-haven commodity is trading below its primary uptrend line, fueling a more intense selloff as investors price in aggressive rate hikes from major central banks.

Big Picture Catalysts

• Warsh Administration Rate Hikes: Since the confirmation of Fed Chair Kevin Warsh, the asset class has faced sustained headwinds. April’s 3.8% CPI print dashed the final hopes of 2026 rate cuts, driving real yields higher.
• Geopolitical De-risking: The seven-week cease-fire in the Middle East between the United States and Iran continues to play out successfully. As commercial oil exports through the Strait of Hormuz have stabilized back at 75% to 80% of their pre-2024 levels, the near-term geopolitical risk premium has effectively faded.
• Central Bank Buying Hasn’t Helped: China’s central bank buying spree for 17 months is looking like a lost cause. A flood of liquidation from the spot market is outpacing the central bank’s accumulation while the dollar is strong.

Gold (XAU/USD) Technical Analysis

On the 4H chart, gold is clearly breaking down. There are multiple bearish reversal candles that took the asset decisively below the $4,500 round figure support and the 50 Simple Moving Average near $4,450. The breakdown from the earlier $4,600 zone intensified the downside.

The RSI is back below 45 and not yet oversold, meaning that there is still very little upside momentum. The price action is likely to target lower extension zones, where the $4,500-$4,538 zone represents a dead spot on the way down.

Resistance levels: $4,420, $4,450 (SMA), and $4,460 (grey trendline). Support levels: $4,380 (immediate support), $4,367, and $4,341 (structural support).

Trade Setup

A clean continuation trade is available as the price sells through lower levels in the channel.

• Entry: Sell Market or Sell Stop at $4,393
• Take Profit 1: $4,367
• Take Profit 2: $4,341
• Stop Loss: Strictly placed above local resistance at $4,420

Trade Summary

Gold’s trade view has been adjusted to a new technical setup. A multi-year bullish trend is being broken with the easing of tensions in the Middle East and the start of a restrictive monetary policy by the Federal Reserve. In the interim, the bears are in control. While the major banks like JP Morgan still see gold prices rallying to $6,000, retail traders must take the long term to see these gains. Every rally up to channel resistance remains a viable bearish opportunity until gold bottoms out.

ABOUT THE AUTHOR See More

Arslan Butt

Lead Markets Analyst – Multi-Asset (FX, Commodities, Crypto)

Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics. His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker. His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.

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