Gold Price Forecast: Bearish Flag May Trigger Second Leg Down

Author: Bruce Powers

Published: March 11, 2026

Overview

The article discusses the current state of gold prices, which are consolidating near the 20-day moving average following a significant selloff triggered by a bearish wedge pattern. This consolidation phase is critical as it may indicate a potential second leg down in gold prices.

Key Points

• Wedge Trigger and Selloff: Gold experienced a sharp decline after a rising wedge pattern was triggered, leading to a selloff that brought prices down to a seven-day low of $4,996.
• Consolidation Phase: Following the initial selloff, gold has been trading within a narrow range, indicating a pause in volatility and setting the stage for a potential continuation of the downward trend.
• Bearish Flag Formation: The consolidation is forming a small bearish flag pattern, which could trigger further declines if prices fall below $5,015 and $4,996.
• Support Levels: The 50-day moving average is identified as a key support level, currently near $4,914, with a higher swing low at $4,842. If these levels are breached, further downside targets include the 100-day moving average at $4,543.

Market Implications

The article emphasizes that the bearish implications of the wedge pattern could lead to a significant break below the 50-day moving average, which would reinforce the bearish outlook for gold. A second leg down is expected to be accompanied by strong bearish momentum, potentially leading to a test of lower support levels.

Conclusion

In summary, the current technical analysis of gold suggests a cautious outlook, with the potential for further declines if key support levels are broken. Traders should monitor the price action closely as the market navigates this consolidation phase.