Gold Price Short-term Outlook: XAU/USD Plunges 17% – Key Support Break Sparks Risk
By Michael Boutros, Sr. Technical Strategist
Date: March 19, 2026
Overview
The price of gold (XAU/USD) has experienced a significant decline of nearly 17% from its monthly high, following the Federal Reserve's recent rate decision. This sharp drop has led the price to test a crucial support level, which could determine the future direction of gold prices.
Technical Analysis
Gold's recent collapse has seen it break through multiple support levels, with the current focus on a pivotal support zone near the 2025 high. A reaction at this level is critical; a sustained move below could lead to further declines, while stabilization might slow the losses.
Key Levels
- Resistance: 4660/80, 4791-4815 (key), 4996
- Support: 4533/40 (key), 4319, 4224/51
The momentum indicators have weakened significantly on both daily and weekly charts, indicating increased selling pressure as the price approaches this critical support zone. The next few sessions will be crucial in determining whether buyers will step in or if selling will continue.
Recent Price Action
In the previous analysis, it was noted that XAU/USD was at risk of marking an outside-weekly reversal off resistance at multi-week highs. The current decline has brought the price down to 4533/40, which is defined by the 61.8% retracement of the October lows and the 2025 high-day close. A close below this level could trigger further downside movement.
Market Outlook
As the economic calendar appears light for the upcoming week, market participants are advised to keep an eye on geopolitical developments, particularly the escalating situation in the Middle East. The weekly closes will provide further guidance on the gold market's direction.
For traders, the immediate focus remains on the 4660/80 resistance level, with a close below 4533 necessary to fuel the next major leg of the decline.