Gold Price Tests Key Support Levels Amid Weakening Trend

Gold's price has been weakening since Wednesday, when it lost its 50-day moving average. The metal tested support levels near $4,235 and $4,241 on Thursday, but failed to hold at the uptrend line.

The current decline is the first test of the 50-day moving average as support since August 5, when gold decisively reclaimed it. If the prior low breaks as support, the next downside target would be $4,203, which is the lower swing high from earlier this month.

However, the area of support remains intact, and another leg up in the advance that followed the July low could still occur unless the 78.6% Fibonacci retracement zone fails as support. A reclaim of the 50-day moving average above $4,312 would signal a one-day bullish reversal.