Throughout this entire week, Gold repeatedly attempted to close above $4087, but failed every single time. From Monday to Wednesday, we did witness several impulsive buying moves, yet every rally into the $4087 region was met with strong rejection. This clearly tells us that sellers are still in control around that level and that institutional buyers are not showing enough interest to support a sustained breakout.
Because of that, I believe a very attractive selling opportunity is developing over the next few sessions. So make sure you read this analysis carefully, because it could help you lock in a high-probability trade with me.
This week, the $4030-$4065 zone has become the main battlefield between buyers and sellers. So far, the market has failed to break below this range, but it has also failed to break above $4065. Price is simply consolidating while both sides continue fighting for control.
The most important question now is, who will win this battle? Buyers or sellers?
One thing you should always remember is that whenever the market spends a long time consolidating in one area, it means a large number of orders are building there. Once that consolidation finally breaks, the market usually delivers a very strong move in the direction of the breakout.
I have been closely watching Gold over the past three days, and according to my analysis, if the bulls were truly strong, the market should have already closed above $4080. Instead, every time price approached that level, sellers stepped in aggressively and rejected the move. Even after several strong buying pushes from the lows, sellers continued to absorb all of that demand.
To me, this is a clear sign that the sellers are currently stronger than the buyers.
Another important observation comes from Tuesday's CPI move. If you look at the 4-hour candle that formed during the CPI release, its low has still not been broken. Instead, Gold has continued retracing higher and repeatedly attempted to move back into buying territory.
After a strong impulsive move, many traders naturally assume the market is only retracing before continuing higher. As a result, they begin buying while treating the origin of that move as a strong support zone, placing their stop losses just below it.
Keeping that psychology in mind, I believe the low of the CPI 4-hour candle, which is around $4014, has become an important liquidity zone. As long as Gold remains above this level, the market can continue attracting more buyers.
However, the moment Gold breaks below $4010, I expect a highly aggressive selling move that could push the market directly toward $3977, $3944, $3920, $3908, and eventually $3890.
The reason is simple.
As you can clearly see, Gold has repeatedly found support around the $3950 region, meaning a significant amount of buy-side stop losses are likely resting below that area. On top of that, Monday's session managed to close above $4000, which encouraged many random retail traders to enter long positions. Most of those traders are still holding their buys with hope.
Based on how Gold has behaved throughout this year, the market has consistently moved toward the side where the largest pool of liquidity was waiting. Looking at the structure formed over the past few weeks, I still consider the overall trend to be bearish.
Most importantly, we have not yet received a valid higher-timeframe buying confirmation.
Yes, buying pressure has appeared several times, but notice when those aggressive buying moves occurred. They mainly happened during high-impact news events. In my opinion, those spikes were strong enough to create FOMO and attract random buyers into the market, while the broader trend remained unchanged.
For that reason, I have no interest in buying Gold unless we see a daily close above $4080.
Until that happens, I will continue looking for selling opportunities and prefer holding positions for larger downside targets because I strongly believe that a major bearish move in Gold is approaching.
I hope you found this psychological analysis logical and that it helped you understand the market from a different perspective. Wishing everyone the very best for Thursday. I hope you all have a profitable trading day.
What is your current view on Gold?
Do you think buyers will finally break above $4080, or are sellers about to take full control?
Let me know your opinion in the comments.
Because of that, I believe a very attractive selling opportunity is developing over the next few sessions. So make sure you read this analysis carefully, because it could help you lock in a high-probability trade with me.
This week, the $4030-$4065 zone has become the main battlefield between buyers and sellers. So far, the market has failed to break below this range, but it has also failed to break above $4065. Price is simply consolidating while both sides continue fighting for control.
The most important question now is, who will win this battle? Buyers or sellers?
One thing you should always remember is that whenever the market spends a long time consolidating in one area, it means a large number of orders are building there. Once that consolidation finally breaks, the market usually delivers a very strong move in the direction of the breakout.
I have been closely watching Gold over the past three days, and according to my analysis, if the bulls were truly strong, the market should have already closed above $4080. Instead, every time price approached that level, sellers stepped in aggressively and rejected the move. Even after several strong buying pushes from the lows, sellers continued to absorb all of that demand.
To me, this is a clear sign that the sellers are currently stronger than the buyers.
Another important observation comes from Tuesday's CPI move. If you look at the 4-hour candle that formed during the CPI release, its low has still not been broken. Instead, Gold has continued retracing higher and repeatedly attempted to move back into buying territory.
After a strong impulsive move, many traders naturally assume the market is only retracing before continuing higher. As a result, they begin buying while treating the origin of that move as a strong support zone, placing their stop losses just below it.
Keeping that psychology in mind, I believe the low of the CPI 4-hour candle, which is around $4014, has become an important liquidity zone. As long as Gold remains above this level, the market can continue attracting more buyers.
However, the moment Gold breaks below $4010, I expect a highly aggressive selling move that could push the market directly toward $3977, $3944, $3920, $3908, and eventually $3890.
The reason is simple.
As you can clearly see, Gold has repeatedly found support around the $3950 region, meaning a significant amount of buy-side stop losses are likely resting below that area. On top of that, Monday's session managed to close above $4000, which encouraged many random retail traders to enter long positions. Most of those traders are still holding their buys with hope.
Based on how Gold has behaved throughout this year, the market has consistently moved toward the side where the largest pool of liquidity was waiting. Looking at the structure formed over the past few weeks, I still consider the overall trend to be bearish.
Most importantly, we have not yet received a valid higher-timeframe buying confirmation.
Yes, buying pressure has appeared several times, but notice when those aggressive buying moves occurred. They mainly happened during high-impact news events. In my opinion, those spikes were strong enough to create FOMO and attract random buyers into the market, while the broader trend remained unchanged.
For that reason, I have no interest in buying Gold unless we see a daily close above $4080.
Until that happens, I will continue looking for selling opportunities and prefer holding positions for larger downside targets because I strongly believe that a major bearish move in Gold is approaching.
I hope you found this psychological analysis logical and that it helped you understand the market from a different perspective. Wishing everyone the very best for Thursday. I hope you all have a profitable trading day.
What is your current view on Gold?
Do you think buyers will finally break above $4080, or are sellers about to take full control?
Let me know your opinion in the comments.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.