Gold (XAU/USD) reached a new all-time high of $5,598 before reversing sharply in a single session, forming a bearish "outside day" pattern. This price action indicates rising volatility and a high probability of an imminent short-term pullback or consolidation phase. The key level to watch is the rising 10-day moving average (currently ~$4,970), which now serves as critical near-term support. A successful test of this support could set the stage for the next leg higher in the broader bull trend.
Key Points:
Bearish Reversal Signal: Thursday's trading formed a bearish outside day (price made a new high then closed below the prior day's low) immediately after hitting a record high.
Momentum Shift: This ended an 8-day rally and the pattern of consecutive higher daily lows, signaling a pause or reversal in short-term momentum.
Critical Support: The 10-day moving average (~$4,970) is the primary near-term support level. A hold above it suggests a healthy consolidation; a break below could trigger a deeper correction.
Exhaustion at Fibonacci Target: The sell-off occurred precisely at a major Fibonacci extension target ($5,576), marking a potential exhaustion point for the recent parabolic advance.
Increased Volatility: The exceptionally large daily trading range points to rising volatility and a battle between buyers and sellers.
Broader Trend Still Bullish: Any pullback is currently viewed as a healthy correction within a strong ongoing bull trend, confirmed by a recent major channel breakout on weekly charts.
Potential Downside Targets: If the 10-day MA fails, the next significant support zones are around $4,537 (prior highs) and the 10-week moving average (~$4,536).
