So, the upside movement that we were expecting during FOMC is exactly what we got. However, that rally was mainly created to trap random sellers. Gold even managed to break above the 4100 level, trapping everyone who had been selling since Monday or from the 4100 zone. What's even more interesting is that the market reversed almost exactly from Monday's high.
The FOMC rally was so aggressive that many traders who were bearish got scared and closed their sell positions, while others even completely changed their bias from bearish to bullish. But in my opinion, this entire move was nothing more than a liquidity trap. During high-impact news events like FOMC, the market usually attacks the side where the most liquidity is resting. It quickly traps that crowd, and then on the following day, the market often resumes its original direction.
If you notice today's price action, almost 50% of yesterday's FOMC rally has already been erased. If buyers were actually in control, Gold should have found support around the 4070 area and continued higher. Instead, that level has already broken with strong selling volume. Looking at the overall psychology and market structure, sellers are still stronger than buyers, and I still believe Gold is preparing for a much bigger downside move. In my view, the 4000 breakdown is only a matter of time and could happen within the next few sessions.
Now let me explain the reason behind this view along with today's trading plan.
The 4115 level remains one of the strongest resistance zones on the chart. Until Gold manages to close above this level, I don't think traders expecting an immediate breakout toward 4200 will get what they're waiting for.
Another interesting psychological factor is the year's major low around the 3942-3950 area. Every time Gold comes close to this region, it quickly reverses. Because of this repeated behavior, many traders now believe that the next breakdown below 4000 will finally lead to a huge bearish move. As a result, a large number of traders are already preparing for aggressive selling at lower prices.
But here's where psychology becomes important.
Gold doesn't want the majority of traders to participate in the real breakdown. Instead, it keeps changing direction, trapping both sides repeatedly. First, it scares sellers with sharp rallies. Then, once traders start buying based on bullish price action, it traps those buyers as well. Right now, this market is not rewarding textbook price action—it is rewarding patience and understanding of crowd psychology.
Personally, I believe both of these events will eventually happen:
* Gold will break above 4200.
* Gold will also break below 3950.
The only question is when, not if.
And history tells us that the biggest moves usually happen when the majority of traders least expect them. By the time everyone becomes confident about one direction, institutions often do the exact opposite.
Now let's talk about yesterday's NY session.
Gold briefly broke below 4000, but immediately recovered and closed back above this psychological level. That tells us one important thing—many traders entered fresh buy positions around 4000. Since 4000 is a major round number, it's naturally a zone where both buyers and sellers become very aggressive.
At this point, the biggest liquidity pool is still resting around the 4000 level.
Most of the sellers from Monday were already trapped during the FOMC spike. I also don't think many fresh traders sold after seeing such a strong bullish candle. Instead, the majority of retail traders who were waiting for a retracement are now looking at the 4040-4055 area as the perfect buying opportunity. They believe that after such a strong FOMC rally, Gold should simply retrace and continue moving higher—as traditional price action suggests.
But I don't think that's what the market wants to do.
In my opinion, Gold may still give one small upside move to attract even more buyers, but after that, I expect selling pressure to return. My downside target for today remains around 4020, and I still believe that the 4000 breakdown could happen either by tomorrow or early next week. Since this is month-end, I expect Gold to create one final major liquidity trap before revealing its real direction.
Overall, I believe the coming month could offer some excellent trading opportunities, so stay active and don't miss any important updates.
I hope today's Thursday analysis helped you understand not only the market structure but also the psychology behind these moves. Wishing everyone a profitable trading day. Good luck!
👇 What's your view on Gold's next move?
Do you think Gold will break above 4200 first, or will 4000 finally collapse? Let me know your opinion in the comments!
The FOMC rally was so aggressive that many traders who were bearish got scared and closed their sell positions, while others even completely changed their bias from bearish to bullish. But in my opinion, this entire move was nothing more than a liquidity trap. During high-impact news events like FOMC, the market usually attacks the side where the most liquidity is resting. It quickly traps that crowd, and then on the following day, the market often resumes its original direction.
If you notice today's price action, almost 50% of yesterday's FOMC rally has already been erased. If buyers were actually in control, Gold should have found support around the 4070 area and continued higher. Instead, that level has already broken with strong selling volume. Looking at the overall psychology and market structure, sellers are still stronger than buyers, and I still believe Gold is preparing for a much bigger downside move. In my view, the 4000 breakdown is only a matter of time and could happen within the next few sessions.
Now let me explain the reason behind this view along with today's trading plan.
The 4115 level remains one of the strongest resistance zones on the chart. Until Gold manages to close above this level, I don't think traders expecting an immediate breakout toward 4200 will get what they're waiting for.
Another interesting psychological factor is the year's major low around the 3942-3950 area. Every time Gold comes close to this region, it quickly reverses. Because of this repeated behavior, many traders now believe that the next breakdown below 4000 will finally lead to a huge bearish move. As a result, a large number of traders are already preparing for aggressive selling at lower prices.
But here's where psychology becomes important.
Gold doesn't want the majority of traders to participate in the real breakdown. Instead, it keeps changing direction, trapping both sides repeatedly. First, it scares sellers with sharp rallies. Then, once traders start buying based on bullish price action, it traps those buyers as well. Right now, this market is not rewarding textbook price action—it is rewarding patience and understanding of crowd psychology.
Personally, I believe both of these events will eventually happen:
* Gold will break above 4200.
* Gold will also break below 3950.
The only question is when, not if.
And history tells us that the biggest moves usually happen when the majority of traders least expect them. By the time everyone becomes confident about one direction, institutions often do the exact opposite.
Now let's talk about yesterday's NY session.
Gold briefly broke below 4000, but immediately recovered and closed back above this psychological level. That tells us one important thing—many traders entered fresh buy positions around 4000. Since 4000 is a major round number, it's naturally a zone where both buyers and sellers become very aggressive.
At this point, the biggest liquidity pool is still resting around the 4000 level.
Most of the sellers from Monday were already trapped during the FOMC spike. I also don't think many fresh traders sold after seeing such a strong bullish candle. Instead, the majority of retail traders who were waiting for a retracement are now looking at the 4040-4055 area as the perfect buying opportunity. They believe that after such a strong FOMC rally, Gold should simply retrace and continue moving higher—as traditional price action suggests.
But I don't think that's what the market wants to do.
In my opinion, Gold may still give one small upside move to attract even more buyers, but after that, I expect selling pressure to return. My downside target for today remains around 4020, and I still believe that the 4000 breakdown could happen either by tomorrow or early next week. Since this is month-end, I expect Gold to create one final major liquidity trap before revealing its real direction.
Overall, I believe the coming month could offer some excellent trading opportunities, so stay active and don't miss any important updates.
I hope today's Thursday analysis helped you understand not only the market structure but also the psychology behind these moves. Wishing everyone a profitable trading day. Good luck!
👇 What's your view on Gold's next move?
Do you think Gold will break above 4200 first, or will 4000 finally collapse? 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.