Gold Price Analysis & Outlook for the Week

Understanding the context behind price movements is crucial to avoid chasing the market. Price doesn’t move randomly—it has objectives to accomplish. Let’s analyze gold’s recent price action and what we can expect in the coming week.

Gold’s Current Structure

Gold has been in a bullish trend for quite some time, recently reaching a strong resistance level at 2946. On the 4H timeframe, a head and shoulders pattern has formed at this key level, which often signals a potential reversal.

Price initially broke structure by taking out the previous higher low (HL) on the 4H timeframe. However, it failed to close below the HL, only wicking through before pushing back up. This brings us to a critical question:

What Is the Objective of Price?

Despite breaking the HL, price has not yet retested a significant support level or mitigated a demand zone—indicating that the selling objective remains unmet.

So why is price pushing up?

• It could be trapping buyers and building liquidity before a deeper move down.
• The current push-up may be a retracement toward the origin supply zone, aligning with the resistance at 2946.

Trading Plan for the Week

As a day trader, patience is key. Wait for price to retest the resistance level and observe price action on a lower timeframe (15M or lower) for confirmation before entering a sell trade.

Trade Execution & Risk Management:

• Entry: Look for confirmation based on your entry strategy (e.g., change of character, bearish engulfing, or other criteria).
• Stop Loss: Place it above the head of the head and shoulders pattern.
• Targets:
  • First target: Liquidity resting below the recent lows.
  • Second target: Demand zone where price might react.

By following this structured approach, you can align with market objectives instead of reacting impulsively. Trade smart and manage risk accordingly.