Gold Price Falls After Bearish Reversal

Gold prices fell sharply on Tuesday, reaching a seven-day low of $4,996. This move signaled a bearish wedge reversal, with sellers regaining control. Gold’s upside remains capped near $5,419.

The drop tested support near the 20-day moving average before an intraday bounce. The day’s trading range covered the full range of five of the last six days. This reflects strong conviction among sellers.

Gold’s recent advance formed a rising bearish wedge pattern. This pattern broke to the downside after falling below a short uptrend line. That line had offered support since the February low of $4,402.

Monday’s high of $5,419 marked the top of this wedge. Gold briefly exceeded a 78.6% Fibonacci retracement level at $5,345 before ending the day with a bearish candlestick pattern. Reaching this Fibonacci level and the subsequent reversal suggest sellers are now in charge.

Potential support for gold lies near the 50-day average, currently at $4,830, and a swing low at $4,842. The 50-day average has previously acted as a strong support level, including during the 21.4% decline to the February low.