Gold (XAU/USD) Price Forecast: Bull Hammer Reversal Triggers Above $4,161

NEW YORK (October 23) Gold held steady within Wednesday’s range, testing $4,066 support, with a close above $4,161 eyeing a bull hammer breakout.

Chart Action

Gold traded tightly on Thursday, staying within Wednesday’s range to form an inside day. Wednesday’s potential bull hammer candlestick, finding support at the 20-day moving average ($4,039), hit the first lower target zone. Early signs of demand from yesterday’s $4,003 low suggest a bounce could spark if prices break higher.

Support Levels

The 20-day average emerged as key support after Tuesday’s sharp drop breached the 10-day line. Since late August, gold has leaned on the 10-day average for dynamic support, but the top rising channel line, tested at $4,066 today, now joins the 20-day as a critical floor. Holding here keeps the bullish structure intact.

Trade Setup

The pullback remains mild, and Wednesday’s hammer at the 20-day line hints at a potential reversal. A breakout above $4,161—Wednesday’s high—would trigger the hammer, likely reclaim the 10-day average and target Tuesday’s wide $4,080-$4,375 range. Such a move signals shifting momentum, with recent highs back in play.

Weekly Context

With one session left, the weekly chart shows limited damage—a higher weekly low and slightly higher high suggest resilience. Tuesday’s aggressive selloff, however, implies consolidation within its $4,080-$4,375 range may precede a clear advance. The 20-day support test flags a possible bottom, but time may be needed to solidify gains.

Outlook

Gold’s pause at $4,039 support sets up either sideways consolidation or a bounce-and-reverse. A close above $4,161 fuels bullish hopes toward $4,375, while sub-$4,039 risks deeper tests. The weekly pattern leans slightly bullish if $4,066 holds. Watch today’s close—breakout signals strength, but Tuesday’s range could cap near-term moves.

FXEmpire