GOLD - BEARISH FLAG OR BULLISH TREND REVERSAL?Symbol - XAUUSD
CMP - 3238
Gold is emerging from a local corrective channel, commonly identified as a 'Flag' formation. Consolidation continues near the base of this potential reversal pattern, with market focus centered on the critical 3200 level.
Gold is experiencing downward pressure amid renewed trade optimism and strength in the US dollar. Prices are retreating early Wednesday as market participants engage in profit-taking following a recent rebound from weekly lows. Although US inflation data came in below expectations, it failed to support earlier assumptions of imminent monetary easing. The Federal Reserve’s continued reluctance to initiate rate cuts is exerting additional pressure on the precious metal. Moreover, growing optimism surrounding potential trade agreements between the United States, China, the United Kingdom, and other nations-along with renewed hope for diplomatic progress in the Russia-Ukraine conflict is dampening gold’s appeal as a safe-haven asset.
From a technical standpoint, the outlook remains bearish. The absence of a meaningful rebound from support suggests sustained selling pressure. A consolidation phase appears to be developing ahead of a potential test of the 3200 support level.
Key Resistance Levels: 3243, 3257, 3269
Key Support Levels: 3222, 3200
Should price action continue to consolidate within the current local range and repeatedly test support in the 3222-3200 zone, further downside may be anticipated in the short to medium term. However, in consideration of common market maker tactics, a brief short squeeze targeting local resistance zones cannot be ruled out prior to any subsequent decline.
