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Gold prices achieved the first upside target at $3,311 at the start of the European trading session, reaching a high of $3,325, though gains remained modest. As highlighted in the previous report, price consolidation at $3,270 was expected to halt the bullish momentum and apply negative pressure, potentially triggering a downward corrective phase. This played out in the current session, with gold retreating to $3,245 in early trading.
A closer look at the 4-hour chart reveals that the price has broken below a minor uptrend support line. The Relative Strength Index (RSI) is issuing negative signals, indicating fading bullish momentum, while the simple moving averages continue to apply downward pressure.
Given these factors, there is a possibility of the downtrend extending further in the near term, with the first target at $3,235. A break below this level could open the door for losses toward $3,210 and $3,200, respectively.
However, a return to price stability and consolidation above $3,280 would negate the immediate bearish bias and could restore the bullish outlook, with a potential retest of $3,315.
Traders should exercise caution ahead of the release of key U.S. economic data, including Preliminary GDP (Quarterly) and Weekly Unemployment Claims. These events may trigger heightened volatility in gold prices.
Disclaimer: Trading in CFDs involves risks, and all scenarios are possible. This analysis is not investment advice but rather an interpretation of the current technical landscape for gold.
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