XAUUSD - 4H Gold’s Potential Downturn
Updated
XAUUSD has recently surged to the top of its ascending channel, reaching above the $2,500 level. This move, however, appears to be a liquidity hunt, where the market triggers stops above significant levels before reversing direction. After this liquidity grab, technical analysis suggests a strong possibility of gold retracing within the ascending channel.Fundamentally, several factors are contributing to the potential downside. The recent easing of tensions in the Israel-Palestine conflict has reduced demand for safe-haven assets like gold. Additionally, the de-escalation in geopolitical risks generally leads to a pullback in gold prices as investors shift towards riskier assets. Moreover, the broader market sentiment is leaning towards a stronger dollar, especially with expectations of continued monetary tightening by central banks, which could also pressure gold prices downward.
Given these technical and fundamental factors, gold is likely to face a correction back within the channel, with potential support levels around $2,350-$2,400. This retracement would align with the overall market dynamics and investor sentiment shifting away from gold.
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Gold has reached its peak around $2,530, and as we discussed earlier, this was likely the last high before a decline. Currently, I expect a minor rise back into the resistance zone before a significant drop, especially with tomorrow’s PMI and unemployment claims news. Watch closely, as the move back to the channel could be sharp.
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Congrats on the call! Gold dropped exactly as predicted after touching the liquidity zone and has now returned to the channel. Great execution!
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