Veteran trader Peter Brandt has warned that gold price could face a sharp decline after spotting a bearish pattern on its weekly chart.

The pattern, known as head-and-shoulders, often appears when an asset’s strong rally begins to lose momentum. It forms three peaks, with the middle one being the highest.

Gold Price Chart Points to a Major Risk

Brandt’s chart suggests that gold could fall toward $2,890 if it breaks below the key $4,100–$4,200 support zone. Such a move would signal that sellers are gaining control.

However, he stressed that the chart is not a price forecast, and the decline is far from certain. Continued gold purchases by China’s central bank could also help support prices.

That level sits far below current prices, so the move would be dramatic. Traders often wait for a close below the neckline before acting.

Investors should weigh the chart against broader market conditions rather than rely on one pattern alone. That approach matters because markets rarely follow textbook patterns.

Can China’s buying offset a deeper gold correction?

Gold traded near $4,194 an ounce on October 10, about 22% below its January record near $5,405.

The metal rose modestly after Friday’s gains but remains down about 4% so far this year. Gold has traded in a wide range as investors reassess US interest rate expectations.

Even so, the People’s Bank of China added 740,000 ounces that month, its largest purchase since 2023. That buying has continued for 23 straight months.

BeInCrypto also reported that 2026 is on track to become gold’s most volatile year since 1982. Shifting Federal Reserve rate expectations and rising Treasury yields drive much of that swing.

Brandt’s chart raises the possibility of a deeper correction. Central bank demand, however, continues to offer fundamental support.

Investors will watch whether the neckline holds in coming weeks. Whether the pattern resolves lower or fails remains an open question.

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