By: Michael Boutros, Sr. Technical Strategist
Gold prices are undergoing a sharp correction that is pushing the market toward a major technical inflection point. The recent decline, nearing 7% from the monthly high, reflects growing downside momentum at a time when macro uncertainty remains elevated. This convergence of price action and broader risk events is placing increased focus on whether key support levels can hold. The outcome of this test is likely to shape gold’s near term direction as traders assess both technical signals and macro catalysts.
Michael Boutros, Senior Technical Strategist at FOREX.com, has extensive experience analyzing multi timeframe market structures across global commodities and currency markets. His approach focuses on identifying high probability inflection zones where technical levels and macro drivers converge, providing traders with a structured framework for navigating volatility.
Gold prices are approaching a critical support zone as the recent selloff accelerates toward a technically significant range. Michael Boutros highlights that "we're looking at 4540 into 4492", a zone defined by prior yearly and quarterly reference points that have historically acted as major pivots. This clustering of technical levels increases the probability of a strong market reaction, as traders closely monitor whether buying interest can stabilize prices. A sustained move below this zone would signal a continuation of the near-term downtrend and raise the risk of a broader correction in gold markets.
Gold breakdown risk is rising as price action weakens below key short term levels, reinforcing bearish momentum across multiple timeframes. Boutros warns that "losses below this zone would open up the potential for a much steeper decline", pointing toward downside targets near the 4400 level. This shift would not only confirm a deeper corrective phase but also challenge the resilience of the broader bullish structure that has supported gold in recent months. As a result, traders are likely to reassess positioning and risk exposure, particularly with heightened volatility driven by central bank decisions and geopolitical developments.
The key support zone for gold lies between 4492 and 4540, defined by historical price levels and Fibonacci retracement, making it a critical inflection point.
A break below this zone could trigger a deeper decline toward the 4400 level, signaling a continuation of the current downtrend.
Gold would need to break above resistance between 4855 and 4910 to suggest a shift back toward a broader bullish trend.
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--- Written by Lindo Xulu, StoneX TV Journalist
--- Expert: Michael Boutros, Senior Technical Strategist at FOREX.com
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