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Gold Holds Near Highs but Faces Potential Bearish Reversal

Gold Holds Near Highs but Faces Potential Bearish Reversal
Published on

March 7, 2025

Gold Price Forecast: Is a Correction on the Horizon?

Gold prices remain near their recent highs, but technical indicators suggest a potential bearish reversal. If gold drops below $2,891, it could signal a deeper pullback, with the next major support zone lying between $2,810 and $2,813.

Gold Price Consolidates Near Highs

Gold has maintained its strength throughout the week, consolidating near its recent peak. On Tuesday, the precious metal surged to a new short-term high of $2,930, following a strong bullish reversal from support at $2,833, recorded last Friday. Additionally, gold has consistently closed above the 20-day moving average (MA) at $2,909, reinforcing its current bullish trend.

At present, gold is trading in the upper half of its daily range, and unless it surpasses $2,930 before the session ends, a lower daily high and low will be recorded. This could indicate potential weakness in the trend.

Technical Indicators Suggest a Bearish Pullback

Gold recently completed a 78.6% Fibonacci retracement, which was followed by a one-day bearish reversal signal. This increases the likelihood of further downside movement before the correction is complete. So far, only one downward leg has materialized, bottoming at $2,833. Despite gold initially breaking below its 20-day MA last Thursday, it had already lost support at a key uptrend line.

During the current rally, the 20-day MA failed as resistance, but the previous trendline is now acting as a resistance zone. If gold manages to break above this week’s high, this trendline will be a crucial level to monitor.

Gold Price Target: Will $2,810-$2,813 Hold as Support?

A continuation of the bearish reversal pattern will be confirmed if gold falls below $2,891, which could trigger further selling pressure. This would likely lead to a retest of the next major support zone at $2,813, which aligns with the 38.2% Fibonacci retracement level and the initial target of an ABCD (zig-zag) pattern around $2,810.

With multiple indicators pointing to this range, it is likely to act as strong support. If a correction deepens following this pullback, gold could regain momentum and resume its bullish trend, setting the stage for another attempt at new highs.

Key Takeaways:

  • Gold is consolidating near $2,930, but faces potential downside risk.
  • A break below $2,891 could trigger further losses, targeting $2,810-$2,813.
  • 38.2% Fibonacci retracement and ABCD pattern projection suggest strong support in this range.
  • If gold holds at this level, it may resume its bullish trend.

For the latest updates on gold price movements and market trends, check out our economic calendar for key upcoming events.

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