XAUUSD enters October with the H4 structure still clearly favoring sellers, as price continues to form lower highs beneath the descending trendline and remains unable to reclaim the Ichimoku Cloud. Fundamentally, gold has also yet to find enough support to change the trend, with a strong U.S. dollar and elevated U.S. Treasury yields continuing to apply pressure, reducing the relative appeal of a non-yielding asset.
From a fundamental perspective, softer U.S. inflation data has reduced expectations for further aggressive Fed tightening. This should normally be supportive for gold, yet XAUUSD’s response has remained relatively limited. That suggests capital has not meaningfully rotated back into gold, particularly while U.S. yields remain elevated. For me, this is a reason to remain cautious about early-month recoveries.
Technically, the 4,190–4,240 area is the most important zone to watch. The descending trendline, Ichimoku Cloud, and supply all converge around this region, while price is still trading lower near 4,150. If XAUUSD recovers into this area but fails to establish acceptance above it, another lower high could form and keep the bearish structure intact.
My primary scenario is to wait for SELL opportunities during a recovery. If sellers return around 4,190–4,240, XAUUSD could move back toward 4,100. A breakdown below this area would create additional room for a decline toward 4,060–4,080, rather than trying to catch a bottom before the structure has genuinely reversed.
Overall, the current price action still looks more like a recovery within a downtrend than the beginning of a new bullish cycle. The fundamental backdrop has become less negative but is not yet strong enough, while the H4 structure continues to produce lower highs and remains capped by overhead resistance. Until that changes, the advantage remains with sellers.
From a fundamental perspective, softer U.S. inflation data has reduced expectations for further aggressive Fed tightening. This should normally be supportive for gold, yet XAUUSD’s response has remained relatively limited. That suggests capital has not meaningfully rotated back into gold, particularly while U.S. yields remain elevated. For me, this is a reason to remain cautious about early-month recoveries.
Technically, the 4,190–4,240 area is the most important zone to watch. The descending trendline, Ichimoku Cloud, and supply all converge around this region, while price is still trading lower near 4,150. If XAUUSD recovers into this area but fails to establish acceptance above it, another lower high could form and keep the bearish structure intact.
My primary scenario is to wait for SELL opportunities during a recovery. If sellers return around 4,190–4,240, XAUUSD could move back toward 4,100. A breakdown below this area would create additional room for a decline toward 4,060–4,080, rather than trying to catch a bottom before the structure has genuinely reversed.
Overall, the current price action still looks more like a recovery within a downtrend than the beginning of a new bullish cycle. The fundamental backdrop has become less negative but is not yet strong enough, while the H4 structure continues to produce lower highs and remains capped by overhead resistance. Until that changes, the advantage remains with sellers.
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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.