Gold - Weakness is getting stronger!

May 12

Gold has been showing signs of weakness after failing to continue higher from the recent local highs. Price initially looked strong after reclaiming momentum, but buyers are now starting to lose control in the short term. The current structure suggests that gold could be preparing for a deeper retracement. Several bearish signals are beginning to align on the 4h timeframe. This makes the current area very important for determining the next move.

Liquidity sweep
Gold recently performed a liquidity sweep above the previous highs before quickly reversing back lower. This type of move often traps late buyers entering after the breakout. Instead of continuation higher, price rejected aggressively after taking liquidity resting above the highs. These sweeps are commonly seen before reversals because they remove liquidity from the market. The rejection after the sweep is a sign that sellers are becoming active again.

Inversing the FVG
The smaller 4h FVG that previously acted as support is now starting to inverse into resistance. Price is currently reacting below this zone instead of holding above it, which changes the short-term structure. When an FVG flips from support into resistance, it often confirms weakening momentum. This shows that buyers are struggling to reclaim important levels. As long as gold trades below this area, downside pressure remains dominant.

4h FVG
Below current price sits another larger 4h Fair Value Gap that could act as the next magnet for price. Markets often move toward inefficiencies to rebalance price action before continuation occurs. This lower FVG aligns with a potential support region and could become the next target if selling pressure continues. The current reaction suggests that price may gradually move into this imbalance over the coming sessions. Traders will likely monitor this area closely for a possible bounce or continuation lower.

Final thoughts
Gold is showing increasing signs of short-term bearishness after the liquidity sweep and rejection from resistance. The inversion of the smaller FVG adds further confirmation that momentum is weakening. As long as price remains below the current resistance zone, the probability favors continuation lower into the larger 4h FVG. That lower imbalance now becomes the main downside target in the short term. Overall, the current setup suggests caution for bulls while bears slowly gain control.

May 13

Trade active

Gold had quite a strong bounce before the day closed yesterday. However, still expect it to roll over soon