Chart alert: Gold medium-term downtrend triggered as $4,960 support broke

• Medium-term downtrend confirmed: Gold (XAU/USD) broke below the $4,960 key support (50-day MA) with a sharp sell-off, invalidating the prior rally as a “dead cat bounce” and signalling the start of a multi-week bearish phase.
• Hawkish Fed driving downside pressure: A less dovish Federal Reserve, reduced rate cut expectations, and rising 10-year US Treasury real yield have increased the opportunity cost of holding gold, weakening demand.
• Further downside risks ahead: With price action in a descending channel, gold remains bearish below $4,960 resistance, exposing next supports at $4,703–$4,554, unless a recovery above resistance negates the downtrend.

The price actions of Gold (XAU/USD) have triggered a pivotal movement yesterday, staging a bearish breakdown below with a daily close below its 50-day moving average that is acting as a key medium-term support at $4,960 (-3.7% on Wednesday, 18 March 2026 with a daily close of $4,818).

In terms of price structure, yesterday’s plunge suggests that the 23% rally from the 2 February 2026 low of $4,402 to the 2 March 2026 high of $5,420 is considered a corrective rebound, aka “dead cat bounce,” and the next movement is now skewed towards a potential multi-week bearish impulsive down move sequence.

Let’s now discuss some key macro factors that are driving this current multi-week medium-term downtrend phase of Gold (XAU/USD).

Yesterday, the Fed left its Fed funds rate on hold as expected at 3.50%-3.75%. and maintained its forecast of one interest rate cut in 2026, with an upgraded median core PCE inflation trend forecast to 2.7% for 2026 from the previous projection of 2.5% made in December 2025.

Also, the most notable median projection shift was the long-run fed funds rate, up to 3.1% from 3.0%. In addition, the new 'dot plot' highlights a notable shift toward fewer projected rate cuts, and one policymaker is suggesting a rate hike next year in 2027; meanwhile, Governor Waller withdrew his dovish dissent for a cut yesterday. Hawkish vibes are brewing inside the Fed.

Overall, the data compiled by the CME FedWatch tool has indicated that the Fed funds futures market has started to price in zero-interest rate cuts in 2026, down from as many as three cuts at the start of the year. The aggregated probability for the Fed funds rate to be at 3.25%-3.50% (a 25-bps cut from the current rate of 3.50%-3.75%) now stands at 44.8% for the last FOMC meeting in 2026 on 9 December (see Fig. 1).

The 10-year US Treasury real yield jumped by 4 bps yesterday and closed above its 50-day moving average at 1.87%, now en route to potentially retest its medium-term range resistance of 1.98% (see Fig. 2).

Gold (XAU/USD) has a significant direct correlation with the longer-term US Treasury yields, as the precious yellow metal is a non-interest income-bearing asset.

A higher 10-year US Treasury real yield will imply a higher opportunity cost for owning and holding Gold (XAU/USD), in turn, creating a “lesser demand” sentiment that drives down prices of Gold (XAU/USD).

Let us now dissect the short-term trajectory (1 to 3 days) of Gold (XAU/USD) from a technical analysis perspective.

Watch the $4,960 key short-term pivotal resistance (also the 50-day moving average) to maintain the current bearish impulsive down move sequence for the next intermediate supports to come in at $4,703/4,655 and $4,587/4,554 (Fibonacci extension and lower boundary of minor descending channel from 2 March 2026 high) (see Fig. 3).

On the other hand, a clearance and an hourly close above $4,960 invalidates the bearish tone for a squeeze up to retest the next intermediate resistances at $5,040 and $5,125 (also the 20-day moving average).

• The price actions of Gold (XAU/USD) have started to oscillate within a minor descending channel since the 2 March 2026 high of $5,420 (see Fig. 3).
• Before Gold (XAU/USD)’s bearish breakdown of its 50-day moving average yesterday, its daily RSI momentum indicator flashed on a bearish breakdown condition below its key ascending trendline support at the 50 level earlier on Monday, 16 March 2026 (see Fig. 4).