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Gold faces critical breakout test

Gold is retesting its downtrend near $4,130 after months of consolidation. A breakout could revive upside momentum, but support around $4,000 and dollar-driven headwinds remain critical.

Michael J Kramer

Founder, Mott Capital Management

22 Jul 2026, 12:35

Gold retests downtrend resistance

Gold has been in a downtrend since peaking in early March, testing the trendline several times in mid-May and early June but failing to produce a breakout. It is now approaching the trendline again, with resistance around $4,130.

A breakout above $4,130 would be a positive development and could pave the way for a move back towards $4,400.

Moving averages leave more to prove

Gold is still consolidating and has only recently moved slightly above both its 10-day exponential moving average and 20-day simple moving average. The 50-day simple moving average sits just ahead at around $4,250.

The trendline has been tested several times, but so far it has failed to produce a meaningful breakout. That keeps the current move in a testing phase rather than confirming a full technical shift.

Gold - Cash, 2025 to present

Sources: TradingView, Michael J Kramer.

Support and macro headwinds remain critical

Gold continues to hold support around $4,000, although the broader technical picture still resembles a descending triangle, a bearish technical pattern.

Fundamentals are also working against gold, with rising real yields and a strengthening US dollar potentially acting as a headwind for precious and industrial metals.

RSI momentum is improving

Momentum is showing some improvement, with the relative strength index breaking above its own downtrend. That suggests momentum may be starting to shift.

If gold were to break above $4,200, it would likely confirm a cleaner breakout and open the way for a move towards $4,400, with scope for further gains beyond that. For now, however, there is still much to be proven.

Gold faces risk of a sharp breakdown as support comes under pressure

Gold has struggled to behave like a safe haven as the US dollar, bond yields and oil prices rise. A descending triangle pattern suggests a break below support could expose deeper downside.

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Silver may still be heading much lower

Silver has broken below key support around $58.50, reinforcing a bearish technical setup as momentum weakens and the US dollar remains an important headwind.