Gold traders are on edge as a pivotal weekly candlestick pattern unfolds, potentially signaling a bearish reversal after the metal hit a record high of $3,500 earlier this week. As the week comes to a close, a shooting star formation is developing on the weekly chart—typically considered a bearish reversal signal when it appears after an uptrend. However, this pattern only becomes valid if gold breaks below this week’s low of $3,260, confirming a shift in momentum.
Key Technical Levels and Patterns
Weekly Low to Watch: $3,260
Daily Key Support: $3,287 (Thursday’s low)
Immediate Resistance: $3,368 (Thursday’s high)
Major Support Zones:
$3,246 – $3,228: Includes a prior trend high and 50% Fibonacci retracement.
$3,164: Aligns with a 61.8% retracement and a former resistance level turned support.
Bearish Signals Build, But Trend Intact—For Now
The potential weekly shooting star follows a daily shooting star pattern printed on Wednesday—the day gold reached its record high. Since then, prices have softened, with gold failing to reclaim the highs and trading within a tightening range. These two bearish signals—daily and weekly—are stacking up, though a full reversal is still contingent on a breakdown below support.
From a trend analysis perspective, gold remains technically bullish in the broader picture. The 20-, 50-, and 200-day moving averages continue to fan out in a bullish configuration, and the trendline support remains intact. However, the steep acceleration in the recent rally has raised the risk of exhaustion. A breather or pullback might be due, especially as momentum indicators begin to flatten.
What to Watch Next
Confirmation of Reversal: A weekly close below $3,260 would activate the shooting star pattern and likely prompt deeper declines.
Risk of Breakdown: A move below $3,287 today could trigger a more significant sell-off into the $3,246–$3,228 zone.
Broader Correction Zone: Below $3,228, eyes turn toward $3,164—key Fibonacci and structural support.
Fundamental Context Still Gold-Friendly
Despite technical signs of cooling, the broader macro backdrop continues to support gold over the longer term. Trade tensions, Fed dovishness, and expectations for multiple rate cuts in 2025 (estimated at 84 bps) offer a favorable environment for non-yielding assets. Still, markets may need a reset after gold’s staggering year-to-date gain of over $700.
Bottom Line
The next few trading sessions will be pivotal. A confirmed weekly shooting star could mark an intermediate top, potentially triggering a multi-week correction. But unless key support levels give way, the longer-term uptrend remains intact. Traders should stay nimble, monitor for confirmation below $3,260, and be prepared for potential volatility as gold tests critical inflection points.
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