Gold Analysis – Corrective Decline to $4400 Backed by Harmonics and Momentum Divergence

Overview

Gold is currently in a broader bullish cycle but is undergoing a necessary corrective phase. Despite short-term price advances, indicators suggest a controlled decline is likely before a sustainable trend continuation can occur. This analysis highlights key technical signals and price zones that indicate a probable reset towards lower support levels.

Harmonic Structure and Corrective Alignment

On the hourly chart, Gold is pushing into a resistance zone between $5,220 and $5,290. While the price action appears constructive, momentum indicators show signs of exhaustion. A developing AB=CD harmonic formation suggests that once this pattern completes, a downside continuation is expected.

A bearish RSI divergence has been noted, where the latest price high at $5,074 coincided with a lower RSI peak compared to a previous high, indicating weakening momentum and increasing the likelihood of a corrective move.

Support Zones and Structural Targets

Analysis of the hourly structure reveals a strong support zone between $4,440 and $4,380, which has historically acted as a reaction area. This zone is viewed as the most coherent downside target for the current correction.

Additionally, dynamic resistance from late October 2025 is now a technical ceiling, potentially serving as a launchpad for the next major directional move once the corrective decline concludes.

Higher Timeframe Context

On the weekly chart, Gold is trading within a parabolic advance, largely ignoring traditional RSI constraints. This behavior, while uncommon, is not unprecedented during late-stage cycle extensions. The daily chart reinforces this parabolic structure with the 100-day Simple Moving Average acting as dynamic support, suggesting a revisit to the $4,400 area is statistically favored before the broader uptrend resumes.

Macro and Event Risk Considerations

Upcoming U.S. Retail Sales data is expected to influence the U.S. Dollar Index and may introduce short-term volatility in Gold. However, geopolitical developments, particularly regarding Iran-U.S. relations, remain the primary macro risk driver, potentially affecting technical outcomes without invalidating the broader corrective framework.

Final Remarks

In summary, Gold is navigating a technically mature corrective phase within a broader bullish cycle. Key indicators such as harmonic completion, bearish momentum divergence, and structural resistance suggest a controlled decline towards the $4,400 region is likely before the next sustained upside leg. This analysis remains probabilistic, and traders should monitor for confirmation through momentum expansion or invalidation via sustained acceptance above resistance as price approaches key inflection zones.