Gold Holds Key Support at $4,104 Amid Bearish Trend Slowdown
Gold prices are facing a critical juncture as the bearish trend shows early signs of slowing. The spot gold daily chart highlights the risk of chasing further downside, especially after Tuesday’s price action. The market tested a low of $4,104, which is now a key near-term support level. Holding above this level could indicate that the bearish momentum is weakening.
A potential bounce in prices may occur before new lows are tested, possibly leading to a stronger recovery before further declines. For a bullish reversal signal to trigger, gold must break above $4,226. This move would likely be followed by a test of resistance at the 20-day moving average, currently near $4,263 and falling. The 20-day moving average has previously acted as a resistance level during pullbacks.
The next key upside target is the lower swing high at $4,316. A rise above this level would signal a reversal of the short-term decline and put gold in sight of the more significant target at $4,399. Tuesday’s test of the 78.6% retracement and subsequent recovery suggest caution on the downside, but a meaningful improvement in the short-term technical picture requires a break above $4,226.