Gold (XAU/USD) Price Forecast: Pullback Holds Support, Upside Bias Intact
Author: Bruce Powers
Published: January 07, 2026
Overview
The article discusses the recent performance of gold prices, highlighting a temporary pullback that tested key support levels while maintaining a bullish outlook for the future. The analysis focuses on technical indicators and price movements that suggest potential upward trends in gold prices.
Short-Term Pullback
Gold prices experienced a pullback, reaching a low of $4,423, which tested the 10-day moving average support. Despite this, the overall bullish trend remains intact as gold closed above key moving averages. The article notes that the recent price action generated an "outside day," indicating volatility with a high of $4,500 and a low below the previous day's low.
Fibonacci Retracements
The pullback found support near the 38.2% Fibonacci retracement level, following a previous high of $4,381. This suggests that the recent declines are relatively mild and reflect underlying strength in the market. The article emphasizes that the quick recovery from the 20-day moving average further confirms this support level.
Market Structure and Momentum Risks
Gold's market structure remains bullish as long as it stays above the 20-day moving average. However, there are risks of a slowdown in momentum if the 10-day average fails to hold as support. The article points out that aggressive selling following a peak at $4,550 could impact the current upward momentum.
Upside Targets and Key Support Levels
A breakout above the recent high could lead to a bullish continuation towards the $4,500 level, with potential resistance zones identified at $4,664 to $4,713, and a further target at $4,766. Conversely, if gold dips to the 20-day average, it may strengthen its position for a subsequent breakout to new highs, with the 20-day average currently at $4,365.
Conclusion
The article concludes that while gold is currently experiencing a pullback, the overall bullish trend remains intact, supported by key technical indicators. Traders should monitor the 10-day and 20-day moving averages closely, as these levels will be crucial in determining the next direction for gold prices.