GOLD - A countertrend correction before a decline

Jul 13

XAUUSD has reversed lower from the 4120–4133 resistance zone—exactly the scenario we had been anticipating since the end of last week—and is now testing the 4050 support area while forming a false breakout. The fundamental and geopolitical backdrop remains weak, suggesting that the broader decline may continue

Gold fell sharply on Monday, breaking below the $4100 level as renewed tensions in the Middle East boosted the U.S. dollar. Although the dollar is currently consolidating, it remains in a broader bullish trend, supported by ongoing geopolitical uncertainty. The overall market remains under bearish pressure, with the technical outlook still negative. The next major catalysts will be the U.S. CPI report, Fed Chair Warsh's speech, and further developments in the Middle East.
Drivers:
Bearish for gold: Escalation of the conflict (strengthening the U.S. dollar while pushing oil prices and inflation higher), Hawkish Fed signals, Strong U.S. inflation data
Bullish for gold: Geopolitical de-escalation, Weaker-than-expected CPI data, Dovish comments from Warsh

Resistance levels: 4093, 4108, 4133
Support levels: 4054, 4021

Technically, the market is forming a false breakout below the daily support level. Bulls are attempting to defend the area, which could trigger a corrective rebound toward the 4090–4110 interest zone before the broader downtrend resumes toward 4020–3960

Best regards,
R. Linda

Jul 14

Trade active

Jul 15

Trade closed: target reached