Gold is flirting with key technical support, which could define the trend for the coming weeks. And chances of the yellow metal showing signs of strength are rising.
The precious metal is down over 25% from its record high in January. Deeply oversold conditions coupled with a strong support level at the March low of 4100 raise the odds of the support holding, especially as the bullish structural story remains intact.
The small hypothetical positional bid placed at 4100 got filled in after gold fell to 4024 on 11 June. For more details on the levels and the fundamental/structural story, see “Gold: Downside Could Be Limited,” dated 10 June 2026.
Spot Gold (XAUUSD; Daily):
While the position is still in its infancy, let us identify scenarios of how the long position could shape up in the coming weeks.
Scenario 1
An ideal scenario would be that gold establishes some sort of base building formation around the key support of 4100. So far, there is no confirmed evidence that this scenario is in play. At the very least, gold needs to stop making new lows.
On the weekly chart, the yellow metal made a new low last week, suggesting it may be too early to conclude that scenario 1 is in play.
Not only does gold need to stop making new lows, at a minimum, but it also needs to break last week’s high of 4382 for the immediate downward pressure to fade.
Once these two conditions are satisfied, the chances of a material rally would rise.
Having said that, this scenario is still the preferred scenario given the bullish candle created at the support on June 11. The market made a similar bullish candle in March when it fell to 4100. But let’s keep an open mind and explore other scenarios.
Spot Gold (XAUUSD; Weekly)
Scenario 2
Gold succumbs to selling pressure, and the support at 4100 gives way. The chances of a drop initially toward the October 2025 low of 3882 would increase.
However, 3600 would be the next significant support to watch – includes the 50% retracement of the 2022-2026 rise, roughly coinciding with the lower edge of a declining channel from January 2026.
I would place the second bid around 3600-3610 to utilize the opportunity. Recall the long position at 4100 is partial, given there was no firm evidence that a low was in.
The idea of a long at 4100 was more from the extent of retracement, combined with strong support.
Scenario 3
The third case is of an extended base building pattern that stretches for weeks. This would be akin to a sideways/narrow range developing with the low around the psychological 4000-mark and the high established around 4400.
Although the 4000-4400 range would have limited implications in terms of the trend, if 4000 does hold, it would be an encouraging sign for bulls.
Let’s see which scenario unfolds!
