Skip to content

CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please consider our Risk Disclosure Notice and ensure that you fully understand the risks involved. CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please consider our Risk Disclosure Notice and ensure that you fully understand the risks involved.

Gold price forecast: gold breakdown pivots back for resistance test

Overnight, gold has found support and wiggled back for a resistance test at a prior support zone.

Source: Bloomberg

It’s been a busy summer for gold prices. The yellow metal came into the season with a bit of hope. Prices had found a low in mid-May and buyers were starting to take-control, bidding prices back-above the 1800 psychological level and, eventually, up for a test of confluent Fibonacci resistance around the 1880 level.

But, as shared then, that recovery was un-even, and price action built into a rising wedge formation. Such formations are often tracked with the aim of bearish reversals – and reverse it did. A slalom developed in price action in mid-June and largely continued into the second-half of July. All the way until support came into play around the 1680 level. That’s a big price, as it’s now been tested on three separate occasions since gold topped-out in the summer of 2020.

That support test led to another strong topside run. But, again, the move was uneven, and price built into a rising wedge formation.

That one began to breakdown earlier this month and last week was particularly painful, as gold prices sold off each day Monday-Friday. That weakness ran through this week’s open, with price moving all the way down to 1740 before starting to bounce.

Gold eight-hour price chart

Source: TradingView

Gold short-term

On a shorter-term basis, we now have a resistance test at prior support, in a zone marked by two Fibonacci levels that creates a bit of confluence. This zone runs from 1763-1771, and there’s already been a response from sellers. A hold of resistance below 1763 through the end of today would keep the door open for bearish continuation potential, although that may be a bit early. Looking-higher on the chart, and there may be more attractive spots for lower-high resistance, such as a test of 1771 or, perhaps even the support-turned-resistance that’s at 1785.

Gold four-hour price chart

Source: TradingView

The bigger pricture

Taking a step back on gold and we’re in a range. This range has been holding since Gold topped-out in 2020 and pulled back to support at 1680 in early-2021.

Given fundamentals, I’m biasing this range in a bearish fashion but that doesn’t come alive until sellers are finally able to test through support. If, and this is a big if, sellers can hold the line here, we may end up with that fourth support test in the 1680 area, and that test may finally allow for a bearish breakdown.

In the meantime, gold price action is essentially working within pre-defined technical criteria produced by this past two-plus years of range-like price action.

Gold weekly price chart

Source: TradingView

This information has been prepared by DailyFX, the partner site of IG offering leading forex news and analysis. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.


The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer.

Start trading forex today

Find opportunity on the world’s most-traded – and most-volatile – financial market

  • Trade spreads from just 0.6 points on EUR/USD
  • Analyse with clear, fast charts
  • Speculate wherever you are with our intuitive mobile apps

See an FX opportunity?

Try a risk-free trade in your demo account, and see whether you’re onto something.

  • Log in to your demo
  • Take your position
  • See whether your hunch pays off

See an FX opportunity?

Don’t miss your chance – upgrade to a live account to take advantage.

  • Get spreads from just 0.6 points on popular pairs
  • Analyse and deal seamlessly on fast, intuitive charts
  • See and react to breaking news in-platform

See an FX opportunity?

Don’t miss your chance. Log in to take your position.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.