XAU/USD Analysis: Gold loses value, bears test critical support below 4,400 USD

governance_ghost · 2026-01-20T15:10:46+00:00

Gold (XAU/USD) is in a downward correction, rebounding after failing to break the $4,500 barrier. Technical indicators show weakening demand, with potential further declines towards $4,309 if key support at $4,400 fails. Upcoming U.S. Nonfarm Payrolls will be crucial for market direction.

governance_ghost

2026-01-20 15:10:46

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Technical signals confirm downward pressure

Gold (XAU/USD) continues its correction phase, registering losses for the second consecutive session. After an unsuccessful attempt to break the $4,500 barrier, the instrument rebounds downward, and sellers are now focused on previous resistance zones around $4,400. This movement signals a broader shift in market sentiment across commodities.

Technical indicators clearly indicate weakening demand. The MACD histogram has moved into negative territory— the MACD line has fallen below the signal line, suggesting increasing bearish pressure. At the same time, the RSI indicator has dropped below the 50 level, formally confirming entry into the bearish zone. These signals, combined with price declines, suggest that the correction could be deeper than initially expected.

Critical levels and scenarios to watch

XAU/USD is currently trading near $4,428.46, approaching a key support level at $4,400. This area is significant for traders—not only because of the simple 100-period moving average (SMA), which has served as a base since mid-November, but also because it corresponds to the historical highs from December 31 and January 2.

Forming a lower high this week reinforces the bearish narrative. If gold price breaks below the support at $4,400, it could open the way for further declines toward the January 2 low at $4,309, and then to previous lows from December 16 and 31 around $4,270.

On the other hand, potential upside movement will face resistance near Tuesday’s high around $4,500. The historical maximum reached on December 26 at $4,449 remains an important reference point for investors monitoring the possibility of a rebound.

What to watch in the coming days

Market attention is now focused on Friday’s US Nonfarm Payrolls report, which could provide key insights into the Federal Reserve’s future monetary policy moves. This catalyst could determine whether gold finds new support or continues its correction toward the target levels indicated.

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