A close below 2,605 confirms a bearish signal
A daily close below the 2,605 support level would confirm today's bearish signal and put gold on track to test lower support levels before the correction is complete. Notice the parallel downtrend channels on the chart. A breakout above the high channel line was recently attempted, but failed a few days later as gold fell below the line last Friday.
Recent attempts to regain the 20-day and 50-day MAs have also failed. After gold traded above the 20-day line six days ago, resistance was seen near the 20-day line yesterday, and the 20-day line fell below the 50-day line on November 26th, but has yet to break above it. These are all bearish signs, which now have greater meaning.
The decline may test support near 2,537, but swing to the lows.
There's a good chance that the 2,537 swing low could be retested as support, and certainly it looks like the downside could be hit as well. Generally, if price gets rejected on one side of a channel and starts moving in the opposite direction, it may eventually hit the trendline on the other side. The weekly chart held clues to this decline as today triggered a bearish weekly shooting star candlestick pattern from last week. And this represents the failure of the early bullish breakout mentioned above. Unsuccessful patterns can lead to sharp movements.
Low potential support zone around 2,473
Below 2,537 is the 61.8% Fibonacci retracement level of 2,473, which appears to represent the next lowest potential support level for gold. ABCD's downtrend pattern also completes near the 2,475 price level. You may also want to keep an eye out for signs of support near the next lower trendline near the Fibonacci retracement level.
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