FX.co ★ HiDe_N_SeEk | XAU/USD, GOLD

Gold On Tuesday, gold hit a 17-day low of $4,555, setting off a new bearish signal with a decline below a higher swing low. This indicates that the precious metal is still under pressure to decline after last week's negative trigger for a rising wedge pattern. It implies a drop to important support prior to the full correction. Before the trend paused on Tuesday, a 38.2% Fibonacci retracement was finished. Nonetheless, the near-term bearish reversal signal is confirmed by a daily closure below the interim upper swing low around $4,640. Additionally, a decline below a three-week low of $4,601, which corresponds to the 38.2% retracement zone, triggered a weekly reversal signal. When taken as a whole, these facts strengthen the possibility that the recent weakness is not a temporary retreat but rather a part of a larger corrective phase. A wedge's starting point, which is approximately $4,305 as shown on the chart, is a minimum target. However, before the correction is over, support may be found anywhere in the area of $4,402 to $4,265 due to the convergence of many indicators. The rising 200-day moving average around $4,265 indicates the more important potential support zone. The 200-day average will be dominant and may function as a magnet, pulling price toward it if it rises above the $4,305 wedge low before the price reaches it. The March low confidently recovered from support at the 200-day moving average, so if it is reached again, a second bounce is probably in store. The market is seeing the 200-day signal as a crucial dynamic support level in light of the initial positive response. However, it would be reinforced this time by additional signs confirming the wider support zone. As traders determine if the current correction is getting close to exhaustion, this alignment may make the area more important.