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Gold is breaking down and may now have formed a double top pattern. The precious metal fell below the neckline of the double top at 3,230, which implies that gold prices have further to fall. A projection of that double top suggests that gold could fall to around $3,000.There is more at play here, suggesting that something deeper could be unfolding for gold. It had appeared to form a descending triangle, but instead of breaking lower, gold broke higher and climbed back to the previous highs around $3,400, allowing it to create the double top pattern. However, we now see that the base of the descending triangle became the neckline for the double top, and gold continues to hit and bounce off the downtrend that began on April 21. For now, gold is supported by that trend line and the Bollinger Band, presenting an opportunity for a potential bounce.In fact, if gold is still in an uptrend, this would be the most likely point for it to bounce. The concern, however, is that if gold has indeed formed a double top and falls to $3,000, it would break below an uptrend that began at the start of 2025—part of a larger bump-and-run pattern. This would create a more bearish medium-term outlook for gold. Typically, when a bump-and-run pattern breaks the initial trend line, it tends to resolve by falling to a lower, longer-term trend line, which in this case could be around $2,900.Right now, gold is at a critical juncture—if it doesn’t bounce, the likelihood of a larger decline increases significantly.Written by Michael J. Kramer, founder of Mott Capital Management. Disclaimer: CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed.No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction, or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although we are not specifically prevented from dealing before providing this material, we do not seek to take advantage of the material prior to its dissemination.

Gold prices have pulled back from the high reached on 22 April and, more importantly, are nearing a break from the recent period of consolidation. Gold is forming a descending triangle, which could provide clues about the direction prices will take.Typically, a descending triangle is considered a bearish continuation pattern. In this instance, gold has been drifting lower along a downtrend formed intraday on 22 April. Gold is approaching this downtrend line again, having failed to break above it on two previous attempts. A break above this line would be bullish and may sharply increase gold prices, with initial resistance around $3,370 per troy ounce, followed by the recent highs near $3,470.However, if the pattern is a descending triangle, gold may not break out above the downtrend line. Instead, it could break below support at $3,260, which currently forms the triangle's base. A break below this support could initially send gold back towards $3,210, although the larger risk is a more profound decline down to $2,975.For now, however, gold is also finding support at its 10-day exponential moving average (EMA), representing another critical level. A breakdown is unlikely if gold can hold above this moving average. Conversely, if gold slips below the 10-day EMA, it could confirm a short-term shift in trend and indicate further downside potential. Additionally, the relative strength index (RSI) is signalling a potential momentum shift, dropping below 70 and showing signs of bearish divergence.Written by Michael J Kramer, founder of Mott Capital Management Disclaimer: CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only and does not take into account your personal circumstances or objectives. Nothing in this material is (or should considered to be) financial, investment or other advice on which reliance should be placed.No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction, or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although we are not specifically prevented from dealing before providing this material, we do not seek to take advantage of the material prior to its dissemination.

Gold appears to be showing signs of finally cracking after an impressive run higher, with the excitement surrounding its rally potentially approaching a crescendo. The precious metal experienced a sharp intraday reversal on 22 April, a decline that continued into 23 April. Since the recent uptrend began in mid-March, gold has consistently found support at its 10-day exponential moving average (EMA).For now, gold continues to hold just above this key support level; a break below the 10-day EMA could signal a heightened risk of further declines, potentially targeting $3,280 per troy ounce.Gold remains extremely overbought on the weekly chart, trading above the upper Bollinger Band, with the relative strength index (RSI) above 80. This suggests that gold could be due for a sideways consolidation or pullback towards the 10-week moving average at $3,100.Gold also remains overbought on the monthly chart, trading above the upper Bollinger band and with an RSI above 85. In this scenario, a break below $2,900 may lead to a decline towards the 10-month moving average of $2,800.It is not often that an asset class trades at such extreme levels, and this suggests that gold may be overdue for a period of consolidation, either by trading sideways and marking time or by pulling back to retest some of the moving averages situated at lower levels. It continues to indicate that overall gold’s upside may be limited.Written by Michael J Kramer, founder of Mott Capital ManagementDisclaimer: CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only and does not take into account your personal circumstances or objectives. Nothing in this material is (or should considered to be) financial, investment or other advice on which reliance should be placed.No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction, or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although we are not specifically prevented from dealing before providing this material, we do not seek to take advantage of the material prior to its dissemination.

The diamond pattern in gold has played out, but instead of a reversal pattern, it acted as a continuation pattern this time. However, it is possible that the pattern has been completed, and gold could pause its recent rally before resuming its upward bias.Measuring from the top to the bottom of the diamond to project the move in gold from the breakout point suggests that the yellow metal, currently trading around $3,028 per ounce, has largely hit its objective.Additionally, gold has rallied beyond its upper Bollinger Band, which is currently acting as resistance and suggesting potential overbought conditions, supported by the relative strength index surpassing 70. With both indicators in overbought territory, gold could be due for a possible pause — either by consolidating sideways for a few days around the $3,025 to $3,050 region or by pulling back to retest the breakout at $2,950.That is not to say the rally is complete, as the breakout above $3,000 appears significant. After a brief pause, gold could continue rising towards $3,160, based on a projection of the rally that began on 18 December and lasted until 11 February.Gold falling below $2,950 would be a bearish signal, potentially indicating that the recent breakout was false, which could result in gold pulling back to around $2,850.