Gold Price Forecast: XAU/USD clings to Moving Average support below $3,300

• Gold forms a descending wedge pattern, signaling a pause in the bullish trend.
• XAU/USD key technical levels in focus: $3,200 support vs $3,300 resistance.
• Momentum remains neutral, but has a slight bullish inclination.

Gold continues to trade within a narrowing consolidation range on Tuesday, following a record-setting rally earlier this year. After reaching an all-time high in April, the market has shifted into a holding pattern characterized by a descending wedge formation, reflecting a tightening momentum.

At the time of writing, Gold prices are trading 1.37% lower on the day, testing the 20-day Simple Moving Average (SMA) support at $3,288.

Gold consolidates within a descending wedge as key technical levels hold

The daily chart of Gold (XAU/USD) shows the price respecting both the upper and lower boundaries of the descending wedge between $3,121 and $3,356.

The pattern began to take shape after the April all-time high (ATH) and has continued into late May, with price action producing lower highs and lower lows. 

This narrowing range is indicative of decreasing volatility and suggests a potential breakout.

Gold daily chart

Currently, Gold is trading just below the 23.6% Fibonacci retracement (Fib) level of the January-April YTD rally at $3,291 and slightly under the 20-day Simple Moving Average (SMA), currently around $3,288. 

The latest daily candle reflects a bearish rejection from the upper boundary of the wedge, signaling short-term resistance. Despite this pullback, the broader structure remains intact, and the overall technical bias still leans bullish.

Gold clings to Moving Average support, with psychological resistance firming at $3,300

The 23.6% Fibonacci level at $3,291 serves as immediate resistance, while the horizontal level around $3,200 acts as critical near-term support. 

A breakdown below $3,200 could open the door toward the 38.2% retracement level at $3,161, followed by deeper support near the 50% and 61.8% Fibonacci levels at $3,057 and $2,952, respectively.

On the upside, a decisive breakout above the descending wedge, particularly a close above $3,350-$3,360, would likely attract bullish momentum. Such a breakout would target a retest of the April all-time high (ATH) at $3,500.

The Relative Strength Index (RSI) is at around 52, suggesting neutral momentum with a slight bullish tilt. This level indicates that the market is in equilibrium, supporting the view that prices are consolidating ahead of a potential breakout.