Next Support Zones Come into Focus
Now that gold has been rejected once again from resistance at the 20-day moving average, the developing bearish trend may be ready to proceed with its next leg lower. That would suggest that the prior trend low of $3,942 may be broken on the way to a test of support near the higher swing low of $3,886 from October 2025. There is also a reasonable chance that support may fail to hold near that low, which would provide another bearish reversal signal following the prior upswing.
A decisive decline below $3,886 would likely lead to the next lower target zone from approximately $3,704 to around $3,650, derived from the 50% retracement of a prior upswing and the 78.6% Fibonacci retracement of a smaller upswing that is contained within the larger trend structure. There may also be a test of the lower boundary of a falling trend channel near that price zone, depending on when it is reached. Signs of support may emerge near that lower boundary.
Longer-Term Trend Weakness Remains Intact
Gold has been progressively weakening overall since the January peak of $5,597. The deterioration in the technical picture began to have longer-term implications in early June when a confirmed breakdown below an uptrend line and the 200-day moving average occurred. Resistance during bounces shifted from the 50-day moving average to the 20-day moving average, reflecting increasing bearish momentum. Three weeks ago, a longer-term uptrend line defining dynamic support was broken to the downside and the area near the line has been confirmed as resistance. Taken together, short-term weakness is now aligned with longer-term weakness, suggesting further downside and reinforcing the bearish outlook.
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