Gold Price Forecast and Strategy for October 20:
Core Trend Judgment: Short-term topping signals have strengthened, marking the start of a deep technical correction. Core Strategy: Prioritize selling on rallies, with counter-trend bounces at key support levels as a secondary approach.
I. Key Pivot Levels
Core Resistance Zone: 4280 - 4290 USD
This area is the previous key neckline and now acts as a strong pressure zone following Friday's sharp decline. It is the optimal defensive and entry area for shorts.
Core Support Zone: 4200 - 4220 USD
The initial support zone formed after Friday's plunge. A decisive break below this level will confirm the continuation of the downtrend.
Ultimate Support Zone: 4170 - 4180 USD
The final key defensive line for bulls, coinciding with the low point of Friday's drop. The first touch of this zone is expected to trigger a significant technical rebound.
II. Detailed Trading Strategy
1. Primary Strategy: Sell on Rebound
Entry Point: When the price rebounds to the 4280-4290 zone and shows signs of weakness (e.g., bearish reversal candlestick patterns like Evening Star, Bearish Engulfing).
Stop Loss: Place above 4300 USD (positioned above the key resistance zone).
Take Profit Targets: First Target 4230-4220 → Second Target 4200 → Final Target 4180.
2. Secondary Strategy: Buy at Key Support (Counter-trend, Extreme Caution Advised)
Entry Point: When the price experiences its first deep pullback to the 4170-4180 zone and shows clear bullish reversal signals (e.g., Hammer, Bullish Engulfing candlestick patterns).
Stop Loss: Place below 4160 USD (to exit promptly if key support fails).
Take Profit Target: Short-term target 4230-4250 zone. Exit immediately upon reaching the target; trade quickly.
III. Analysis and Rationale
Technical Turn Bearish:
Topping Pattern: A Double Top bearish pattern formed on the 1-hour chart around 4379 USD, triggering a nearly 200-dollar sell-off.
Bearish Momentum: The daily chart formed a large bearish candle engulfing the previous bullish one, and the 4-hour chart shows consecutive strong bearish candles, indicating extremely strong selling pressure.
Key Level Broken: The price has broken below the previous crucial support zone of 4280-4300, which has now converted into strong resistance.
Fundamental Support and Risks:
Supportive Factors: High market expectations for Fed rate cuts in October and December, alongside geopolitical risks, provide medium-to-long-term bottom support for gold, limiting the downside.
Risk Factors: Any news regarding eased trade tensions, resolution of the US banking crisis, or hawkish comments from the Fed could intensify short-term selling pressure on gold.
IV. Risk and Discipline Reminders
Expect Volatility: Following historic price swings, market sentiment is highly unstable. The market is prone to reversals and "choppy" action. Ensure light positioning.
Strict Stop-Losses: It is mandatory to set unconditional stop-losses to prevent losses from escalating on any single trade. This is especially critical for counter-trend long positions.
Follow the Trend: Until the price convincingly breaks above and holds steady at 4300 USD, "selling short on rebounds" is the predominant theme. Buying the bounce is a counter-trend operation; it requires strict position control and a quick exit strategy.
Summary: Technical bearish signals are clear. Traders are advised to patiently wait for the price to rebound into the 4280-4290 resistance zone to establish short positions, offering the best risk-reward ratio. Long positions should only be considered as a short-term bounce strategy at the 4170-4180 strong support zone and require extreme caution.
