Bearish reversal alert: Gold’s head and shoulder pattern indicates a sharp decline ahead”

on Nov 7, 2023
  • XAU/USD trade for a potential $1,912.2 when looking at the head and shoulder pattern
  • The trading signal provided should last 1 week with a potential upside of 3.3%
  • No major high-impact news on the USD this week, so the price will likely remain calm

Follow Invezz on Telegram, Twitter, and Google News for instant updates >

XAU/USD trading strategy

Copy link to section
  • Buy/sell asset: Sell XAU/USD
  • Entry price: $1,978.2
  • Stop loss: $1,993.5
  • Leverage: 1x
  • Take profit 1: $1,960.0
  • Take profit 2: $1,937.0
  • Take profit 3: $1912.2
  • Timeframe: 1 week
  • Maximum profit: 3.32%
  • Maximum loss: 0.77%

XAU/USD chart and technical analysis

Copy link to section

The price of Gold has been in a steep bullish trend since last month and gained almost 11% since then. However, the appearance of the bearish head and shoulder pattern indicates a sharp decline ahead.

The head and shoulder pattern is a bearish reversal pattern that appears when bears dominate the market and a bearish trend is followed afterwards.

I am expecting the price will retest the neckline around the $1,978.25 resistance level before dropping to the $1,912.2 support level and beyond.

Gold fundamental analysis

Copy link to section

Fundamentally, the gold rally was mainly influenced by the Middles-East crisis. As the intensity of the crisis declines the price of gold will also possibly drop.

Moreover, the dollar index was making a correction and was dropping which also helped the gold rally. Now that the Middle East crisis is less relevant and the US dollar seems gaining strength a short trend on gold will likely follow.

Featured Broker

Looking to invest?

Invest and trade CFD stocks, ETFs, digital assets & commodities in minutes with our highest-rated broker.


Gold to US dollar trade idea takeaways

Copy link to section
  • The appearance of the head and shoulder pattern on gold indicates a potential bearish trend ahead.
  • The price will possibly drop to the $1,912.2 support level in the coming days.
  • Multiple take-profit levels have been added to secure profit along the way.
  • The risk-to-reward ratio on this trade is 1:4.2.
  • The entry and stoploss prices have been placed at secure levels with the least probability of getting hit.
  • Good luck!

Looking to capitalise on rising & falling USD, GBP, EUR rates? Trade forex in minutes with our top-rated broker, eToro.

Are you looking for fast-news, hot-tips and market analysis? Sign-up for the Invezz newsletter, today.


77% of retail CFD accounts lose money.

Trade forex
Gold Technical Analysis USD Forex Precious Metals Trading Ideas