Hello traders,
After a sharp sell-off, what matters to me is not how much cheaper gold has become, but whether the market is still willing to sell aggressively at these levels. With XAUUSD trading around 4,000, that behavior is starting to change.
From the 4,140 area, sellers controlled almost the entire move. But once price reached 3,970–3,985, the downside momentum began to fade. Two tests of this zone attracted fresh buying, while attempts to extend below 4,000 were quickly absorbed. After a prolonged decline, this is often the first sign that the balance between supply and demand is beginning to shift.
The M30 chart reinforces that view. The descending trendline has been broken, price is no longer following the previous bearish structure, and the Ichimoku lines are beginning to flatten around 4,000. I would not call this a complete reversal yet, but the market has shifted from an impulsive decline into a potential base-building phase. That distinction matters.
From a macro perspective, gold still faces pressure from expectations that the Fed could raise rates in December. However, the recent easing in the 10-year Treasury yield, combined with oil pulling back from its highs, has reduced some of the pressure that previously weighed on gold. If yields continue to soften, the opportunity cost of holding gold falls and the current recovery has more room to develop.
For that reason, I see 3,970–3,985 as an important repricing zone, rather than simply another technical support. As long as buyers continue to defend this area, the SHORT-TERM TREND has room to shift higher, and I favor BUY positions for a recovery toward 4,080–4,090.
There is no need to predict the exact bottom. This thesis only requires three things to remain intact: strong absorption around 4,000, continued defense of 3,970–3,985, and no sharp rebound in U.S. Treasury yields.
As long as those conditions hold, I believe the risk-to-reward is gradually becoming more attractive for buyers than for traders continuing to chase SELL positions at current levels.
After a sharp sell-off, what matters to me is not how much cheaper gold has become, but whether the market is still willing to sell aggressively at these levels. With XAUUSD trading around 4,000, that behavior is starting to change.
From the 4,140 area, sellers controlled almost the entire move. But once price reached 3,970–3,985, the downside momentum began to fade. Two tests of this zone attracted fresh buying, while attempts to extend below 4,000 were quickly absorbed. After a prolonged decline, this is often the first sign that the balance between supply and demand is beginning to shift.
The M30 chart reinforces that view. The descending trendline has been broken, price is no longer following the previous bearish structure, and the Ichimoku lines are beginning to flatten around 4,000. I would not call this a complete reversal yet, but the market has shifted from an impulsive decline into a potential base-building phase. That distinction matters.
From a macro perspective, gold still faces pressure from expectations that the Fed could raise rates in December. However, the recent easing in the 10-year Treasury yield, combined with oil pulling back from its highs, has reduced some of the pressure that previously weighed on gold. If yields continue to soften, the opportunity cost of holding gold falls and the current recovery has more room to develop.
For that reason, I see 3,970–3,985 as an important repricing zone, rather than simply another technical support. As long as buyers continue to defend this area, the SHORT-TERM TREND has room to shift higher, and I favor BUY positions for a recovery toward 4,080–4,090.
There is no need to predict the exact bottom. This thesis only requires three things to remain intact: strong absorption around 4,000, continued defense of 3,970–3,985, and no sharp rebound in U.S. Treasury yields.
As long as those conditions hold, I believe the risk-to-reward is gradually becoming more attractive for buyers than for traders continuing to chase SELL positions at current levels.
Trade closed: target reached
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Educational only. Not financial advice. Trading involves risk.
Related publications
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Want the full plan behind this analysis?
Free daily Forex, Gold, Crypto setups with reasoning
Entry, invalidation, targets and reviews
👉 Join free: t.me/+-HowPr1J4k03NGY1
Educational only. Not financial advice. Trading involves risk.
Free daily Forex, Gold, Crypto setups with reasoning
Entry, invalidation, targets and reviews
👉 Join free: t.me/+-HowPr1J4k03NGY1
Educational only. Not financial advice. Trading involves risk.
Related publications
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.