Hello everyone,
On the H4 chart, gold is clearly showing a well-defined bearish structure after decisively breaking below the key support zone around 5,000 USD and extending its decline toward the 4,300ā4,400 area. Notably, the most recent leg down came with wide price ranges and a surge in volume, signaling a liquidation phase rather than a typical correction. Moving averages continue to slope downward and diverge, confirming that bearish momentum remains dominant, while current rebounds appear technical in nature and insufficient to alter the overall structure.
At the moment, price is attempting to bounce from oversold conditions, but rallies are still being capped below dynamic resistance levels. Unless gold can quickly reclaim the 4,700ā4,800 zone, downside pressure is likely to persist in the near term.
From a macro perspective, the environment remains unfavorable for gold. The US dollar continues to hold strength, while Treasury yields stay elevated, as expectations for Federal Reserve rate cuts keep being pushed further out. This increases the opportunity cost of holding a non-yielding asset like gold. At the same time, despite escalating geopolitical tensions in the Middle East and persistently high oil prices, these factors are not providing the usual support. Instead, they are reinforcing inflation concerns, which in turn support the case for prolonged restrictive monetary policy.
Another important factor is capital flow. Gold ETFs have seen continued outflows over recent weeks, reflecting cautious sentiment and a lack of strong institutional demandātypically not a positive signal during periods of structural weakness.
Overall, the current decline appears to be more than just a technical pullback; it carries the characteristics of a broader trend continuation, with both technical and macro factors aligned to the downside. However, after such an aggressive sell-off, the market may still experience short-term relief rallies driven by oversold conditions.