XAU/USD enters a correction phase, with bears focusing on the key level of $4400

ChainSpy · 2026-01-20T17:01:34+00:00

Gold continues its weakness this week, facing a key support level at $4400. Investors are watching for the upcoming US non-farm payroll data. Technical indicators show bearish signals; if it breaks below $4400, it may further decline toward the $4309 and $4270 regions.

ChainSpy

2026-01-20 17:01:34

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Market Sentiment Turns, Precious Metals Face Technical Pressure

Gold continued its weak performance this week, with XAU/USD declining for the second consecutive trading day after failing to break through $4,500. The bearish momentum is concentrated around the previous resistance zone near $4,400, reflecting a gradual establishment of a downtrend across the entire precious metals sector. Market focus has shifted away from geopolitical risks, with tensions in Venezuela, China, Iran, and Greenland temporarily marginalized. Investors are now eyeing the upcoming US non-farm payrolls data on Friday, which will provide important guidance for the Federal Reserve’s policy stance.

Technical Signals Indicate Bearish Momentum, Multiple Indicators Converge to Signal Downside

Currently, XAU/USD is trading around $4,428.46, approaching the key psychological level of $4,400. The significance of this level lies in its coincidence with the 100-period moving average (SMA)—a support line that has held since mid-November—and also aligns with the highs on December 31 and January 2. The formation of lower highs this week, combined with weak technical signals, suggests the possibility of a larger correction:

Technical Analysis:

MACD histogram has turned negative, with the MACD line crossing below the signal line, indicating increasing bearish pressure
RSI has fallen below the 50 threshold, signaling a shift into a bearish technical pattern

If gold confirms a break below the $4,400 support level, it could test the January 2 low of $4,309, with further downside potentially targeting the lows from December 16 and 31 (around $4,270). On a rebound, the nearest resistance is near Tuesday’s high of $4,500, while the historic high of $4,449 reached on December 26 remains a key level to watch.

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