Gold fell below the psychological 4000 barrier and the long-term rising support line on Thursday, after a daily close under its declining channel. Investing.com's technical analysis points to 3862 as the next potential target, with 3805-3828 behind it.
Gold sellers pushed the metal through a key support level on Thursday. The Asian session opened with a bearish gap at 3998-4000, which took gold below the psychological 4000 barrier.
Prices then dropped below the long-term rising support line on the weekly chart, according to the analysis. A day earlier, the note had flagged that line near 3955-3960.
Wednesday's close set up the move
Buyers defended the 4000 barrier on Wednesday. Sellers, however, secured a daily close below the lower boundary of the black declining channel.
That breakdown activated a bearish scenario toward a fresh local low near 3862, where the decline would equal the height of the channel. The analysis puts the bulls in an increasingly difficult position.
Downside targets and what could reverse them
If buyers fail to respond near 3862 and invalidate the breakdown below the October low, the selloff could extend toward 3805-3828. That area combines the two boundaries of the red declining wedge with the 127.2% Fibonacci extension.
The author sees only one way to change the picture: a successful invalidation of Wednesday's breakdown below the black declining channel. Until then, the technical outlook stays unfavorable for buyers.
Other metals show similar pressure. Silver is approaching a critical psychological barrier, and copper is showing fresh signs of weakness across multiple time frames, according to the same note.
Source: Investing.com
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