LiamTrading – Risk of correction before hitting the $4000 mark? LiamTrading – GOLD: Risk of correction before hitting the $4000 mark?
Hello everyone,
Gold is approaching the psychological price zone of $4000/oz, but before reaching this historic milestone, the market may be preparing for a short-term correction.
According to Bank of America's technical strategist – Paul Ciana, gold's upward momentum is “too hot,” and a mid-cycle correction could occur soon.
📉 Technical Analysis (Chart H1 – Wolfe Waves Formation)
Observing the chart, a Wolfe Waves pattern is clearly forming:
The Sell zone 3988–3990 is the convergence point of wave number 5 – a potential short-term reversal zone.
The Buy zone 3963–3965 is the retest point of local support, where sellers often tend to take short-term profits.
The Wolfe trend line indicates the possibility that the price will take liquidity above the peak zone before a corrective decline appears.
If a correction occurs, the 3940–3955 zone will be the first reaction area, where strong buying support is present.
🎯 Trading Scenario
Buy retest:
📍 3963–3965
🛑 SL: 3960
🎯 TP: 3972 – 3985 – 4000
Sell following Wolfe wave:
📍 3988–3990
🛑 SL: 3995
🎯 TP: 3972 – 3955 – 3945
🧭 Medium-term Outlook
Although the upward momentum remains dominant, the momentum is gradually decreasing and the market needs to “cool down” to create a new accumulation rhythm.
Dense liquidity zones around POC 3957–3960 may trigger a short-term pullback, before gold gains momentum to advance to the ATH zone of $4000 in the late-week sessions.
📌 Conclusion
Gold remains in a medium-term uptrend, but a short correction is necessary to maintain a sustainable upward structure.
Traders should prioritize flexible scalping, observing reactions at Fibo zones – Volume Profile – and especially the developing Wolfe Waves pattern.
I will continue to update the latest scenario details for XAUUSD daily.
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