Gold Prices Face Bearish Reversal as Head and Shoulders Pattern Forms Amid Weak U.S. Economic Data

Gold prices are at a critical juncture as a Head and Shoulders pattern emerges on the XAU/USD 1-hour chart. Despite support from central bank buying, rate cut expectations, and ETF inflows, the technical pattern signals a potential downside. Investors await Friday’s Nonfarm Payroll (NFP) report for further clarity on the Federal Reserve’s stance.


Technical Analysis: Key Levels to Watch
Gold recently formed a Head and Shoulders pattern, a bearish reversal signal:

  • Neckline (S1 at ~$3,100): A key support level; a break below confirms downside potential.

  • Support Levels: If the pattern plays out, gold may test $3,065, with a further decline to $3,004.

  • Resistance: A rebound above $3,115 could push prices to $3,140-$3,160.

Market Sentiment and Fundamentals

  • Bullish Factors: Rate cut expectations, Chinese ETF adding 233,000 ounces, and strong ETF demand.

  • Bearish Risks: Weak U.S. economic data and a potential strong NFP report boosting the dollar.


Outlook and Strategy
Gold remains in a critical decision zone:

  • Bearish case: A break below $3,100 could trigger a decline to $3,065 and $3,004.

  • Bullish case: Holding above $3,115 could lead to further gains.

  • NFP Report on Friday remains the key catalyst for the next major move

Recent News

EUR/USD stays pressured toward 1.0800 am...

March 21, 2025

Market Insights

Gold prices trading on firm note amid Mi...

October 28, 2024

Market Insights

US Tech 100 Breaks into a Bullish Flag F...

June 03, 2025

Market Insights

Gold approaches all time high amid escal...

April 10, 2025

Market Insights

Gold trading in Symmetrical Triangle bef...

November 13, 2024

Market Insights

NASDAQ made a Doji on daily chart

February 13, 2025

Market Insights

Ana

Cross-Asset Analyst & Trainer

Varun Sharma

Senior Strategist

VJ Yadav

FX Strategist

Bot Window | Bot Window