Short-Term Correction Pressure to Digest Previous Gains

Summary:

Gold remains supported by safe-haven demand amid geopolitical tensions, but profit-taking has triggered a pullback with short-term correction risks.

SELL XAUUSD

Close Time

CLOSED

3017.24

Entry Price

2985.00

3042.00

3996.28 -28.06 -0.70%

38.7

Pips

Profit

2985.00

3013.37

Exit Price

3017.24

Entry Price

3042.00

Fundamentals

Last Friday, gold briefly fell below 3000 due to a stronger US dollar and profit-taking. However, recent events—such as Hamas firing rockets at Tel Aviv, Israel's expanded ground operations in Gaza, attacks on Russian strategic bomber bases in the Ukraine conflict, and lingering Fed rate cut expectations—have kept gold supported by dip-buying and safe-haven demand.

However, Reuters reports that Ukrainian and US delegations met on Sunday under Saudi Arabia's mediation to discuss a ceasefire agreement and plans to protect energy facilities and critical infrastructure. Potential progress in the Russia-Ukraine conflict introduced new uncertainty, placing gold in a fresh tug-of-war between bulls and bears.

Additionally, delayed Fed rate cut expectations and stagnant holdings in the world's largest gold ETF (SPDR) for two consecutive weeks reflect institutional caution. With gold near unprecedented highs and declining trading volume signaling weak short-term momentum, further upside is unlikely. Meanwhile, a near-term correction remains a key risk.

Technical Analysis

XAUUSD: Short-Term Correction Pressure to Digest Previous Gains _1

In the 4H chart, XAUUSD retreated from highs and formed a small head-and-shoulders pattern, indicating short-term bearishness and a need to digest previous gains. While gold found support at the 3,000 level and rebounded, completing a retest of the neckline, recent signs of renewed downward momentum suggest selling at highs. However, the long-term bullish trend remains intact, with key support levels at 3,000 and 2,980.

Selling gold when it rebounds to 3,020 or 3,033. The target price is 2,980 and the stop-loss should stay above 3,040.

Trading Recommendations

Trading direction: Sell

Entry price: 3020

Target price: 3020

Stop loss: 3042

Support: 2980/3000

Resistance: 3040/3030

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