Key Breakdown Levels

If gold breaks decisively below the triangle’s lower boundary, a bearish signal would be triggered. However, confirmation requires further weakness, specifically a decline through the higher swing low at $3,268. A close below that level would confirm a breakdown from the triangle, setting up a test of the May swing low at $3,121. That level also marks the completion of a 38.2% Fibonacci retracement ($3,149) measured from April’s $3,500 record high.

Broader Bearish Risks

Should $3,121 fail to hold, volatility could increase sharply, as failed consolidation patterns often lead to extended moves. Given that this triangle has formed at the top of a long-term bull trend, the expectation under normal conditions would be for an eventual upside breakout. If that does not occur, the 200-Day moving average, now at $3,043, becomes the next major downside target. Whether it is reached or not it indicates increasing seller pressure.

Alternative Bullish Scenarios

While bearish risks dominate in the short term, traders should also remain alert to the potential for false breakdowns. A reversal back into the triangle after a failed move lower could set the stage for renewed bullish momentum. A breakout above the $3,439 swing high, which helps define the triangle’s upper boundary, would confirm such a reversal and signal a return to the longer-term uptrend.

Outlook

Until gold breaks decisively beyond the symmetrical triangle boundaries, momentum is likely to remain muted. Within this consolidation phase, short-term patterns are less likely to follow through. For now, bears control the short-term picture, but both $3,268 on the downside and $3,439 on the upside remain pivotal levels for the next decisive move.

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