FX.co ★ The End | XAU/USD, GOLD

On Friday, the gold market showed signs of a pause, trading in a relatively tight range with a high of $2,762 and a low of $2,733. As of now, prices are hovering near daily lows, suggesting that it may close on a weaker note. This trading range falls at the bottom of Thursday's range, indicating bearish momentum. Additionally, a potential bearish shooting star candlestick pattern is forming which, while not appearing at the top of the extended uptrend, still points to negative sentiment for the day and hints at the possibility of further declines. The schedule is ongoing Gold broke below a short-term trendline on Thursday that has supported a tight consolidation over the past few weeks. This breach put the metal at risk of entering a bearish correction phase, especially given that Thursday's close was in the lower third of its trading range. The current bearish candle adds further evidence of this potential downside. Should gold break below Thursday's low of $2,732, it may test another support zone between $2,700 and $2,686. This range includes the 20-day moving average, the previous trend high, and the top of the recent bull flag. This area is also crossed by an internal uptrend line, reinforcing its importance as a support level. If this range does not hold, the next targets would likely be the 50-day moving average at $2,624 and the bottom of the flag formation near $2,600. Bearish weekly chart signals The weekly chart adds another layer of concern (not shown here). Gold looks poised to complete a falling star doji pattern and could close in the lower third of its weekly range. A decisive move below this week's low of $2,725 would trigger a weekly breakdown, signaling a potential bearish reversal. Confirmation would come with a daily close below this key level. If the decline continues, the next potential weekly support could be last week's low of $2,709, followed by the three-week low of $2,638. The weekly Relative Strength Index (RSI) also suggests overbought with a slight bearish divergence on the daily chart, reinforcing the potential for further correction.