Correction Builds Toward Major Confluence Zone
The new lower swing high begins another leg down in the bearish correction, with a drop below the higher swing low of $4,500 increasing in likelihood. That would provide the next trend continuation signal and put gold in a position to challenge lower potential support levels. The current decline therefore continues to build toward a test of a much more significant support region below, one that could determine whether the broader correction stabilizes or extends further.
As noted above, there is a potentially powerful support confluence zone that starts with the spike low from early-February at $4,401 and ends near the 200-day moving average, now near $4,348. Within that range are other structure levels, the 61.8% Fibonacci retracement of the prior advance at $4,397, an uptrend line, and a prior monthly low. In addition, now that a new lower swing high has been generated, a measured move projects to $4,382, as can be seen by the ABCD pattern shown on the chart. Once the two-downswings match in price, a potential pivot is identified as symmetry is represented between the two swings.
Resistance Levels Remain Clearly Defined
Bounces may test resistance near Friday’s lower daily high of $4,665 and the nearby falling 20-day moving average, now around $4,662. At the same time, the 200-day moving average guards the low end of the range as strong support was seen near it during the sharp selloff in March, confirming it as a key long-trend indicator. That relationship ties back to the broader bearish structure now developing, as gold heads toward a critical decision zone where either renewed demand emerges or the correction deepens further.