"High Probability of Downward Breakout" – Completed on 22/9/2026 at 11:06

On the daily chart, the distance between the 20SMA (4391) and 50SMA (4301) for spot gold prices is gradually narrowing, with the price fluctuating narrowly between these two moving averages. Observing the basic daily chart, gold reached a historical high of $5,595.46 on January 29 this year, followed by a continuous decline to a low of $3,944.23 on June 30. It then initiated a rebound wave, peaking at $4,697.66 on August 25. The total rebound exceeded 38.2% of the prior maximum drop, yet still remained over $70 below the 50% retracement level at $4,769.84, indicating that gold remains in a downtrend on the daily chart.

Since the peak on August 25, gold has declined again, hitting a low of $4,235.08 on September 16 before recovering. The cumulative maximum loss approached 61.8% of the previous rebound (reaching $4,232.04). Subsequently, another rally occurred, but so far the rebound has not even reached 38.2% of the prior move (up to $4,409.85), further confirming the prevailing bearish trend. On the hourly chart, gold has formed double tops at $4,399/$4,396 and $4,374/$4,375, suggesting resistance levels are progressively declining. With gold currently consolidating within the narrowing range between the 20-day and 50-day SMAs, a breakout is inevitable. In my view, the likelihood of a downward breakout is very high, as momentum is building up, awaiting a trigger for a sharp move.

From a Gann Square perspective, the current major trading range for gold lies between strong resistance at $4,410 and strong support at $4,210. Currently, $4,360 appears to have been breached, and short-term price action may test $4,310. If this level is broken, any subsequent rebound will likely face clear resistance, leading to renewed selling pressure. This would suggest that the near-term volatility could shift further down to the $4,310–$4,210 range. With $4,210 considered a key support zone, a break below it would target the $4,000 psychological level.

The above information is for reference only and does not constitute investment advice.