Gold prices are showing signs of a corrective bounce, but the overall outlook for XAU/USD remains bearish in the near term. Following recent declines, gold is attempting to recover, largely due to a softer US Dollar as investors await key economic data and Federal Reserve policy signals. However, this rebound appears to be a short-term reaction within a larger downtrend.

Technical analysis shows that gold has formed a bearish flag pattern, which typically signals further downside. The measured target of this pattern is around $3,245 per ounce. Recent price action saw XAU/USD break below the support of the ascending channel that held since late June. While the current rally may spark optimism, it is likely only a temporary correction from oversold levels on shorter timeframes.

Looking at key resistance levels, gold faces a significant hurdle near $3,345—the high recorded on Monday. Another resistance stands at $3,360, which is a former trendline support. Bulls would need to push prices above these levels to suggest a potential reversal of the bearish trend and to redirect focus toward higher levels near $3,380.

On the downside, if gold fails to maintain recent gains and falls below $3,295, the next support lies at $3,245. This level coincides with both the measured target of the bearish flag and the low from June 30, making it a critical area to watch for further bearish momentum.

In summary, gold remains vulnerable to further declines unless it can break and hold above the key resistance levels mentioned. As long as broader market expectations anticipate strong US economic data and a hawkish Federal Reserve stance, the bearish pressure on gold is likely to persist. For now, the $3,245 to $3,345 range is particularly important for traders assessing the next big move in gold prices.