Gold started the week under clear structural pressure after losing key support, with focus now refocused on negative liquidity. Recent changes in expectations for Fed policy have added another layer to the bearish range as the possibility of a rate hike comes back to the fore.

Market background

Latest quotes from traders showed there was about a 50% chance the Fed would raise interest rates by the end of October, with December also being considered. This is a dramatic shift from previous expectations of lower prices and has a direct impact on gold.

Expectations of higher prices tend to support a stronger dollar and an increase in the opportunity cost of holding gold, which is consistent with recent sell-offs and losses among major structures on the chart.

artistic appearance

Looking at the daily chart, gold has broken out of its previous bullish structure. The market failed to hold above 5,000 and quickly moved lower, confirming a clear shift in order flow.

A pullback from previous highs and a break below support are signs that buyers are no longer in control. Price is currently trading below key structural levels and reacting from key liquidity areas around 4640.

The current trend is more than just a correction. They reflect a transitional phase where markets stop moving gracefully upward and begin to redistribute power.

importance level
Solid resistance/breakout of support: 4950 – 5000
Key Liquidity Area: 4640
Current reaction zone: 4450 – 4500
Strong support (EQH area): 4200 – 4270
Main downside target: 3900
Scenario of the week

Base case – continued decline
As long as the price remains below 4950 – 5000, the structure favors further declines. The recent rally appears to be corrective and gold prices may continue to fall towards 4200-4270, where a stronger reaction is likely to occur.

The second situation – short-term adjustment
If the price is able to push back towards 4640, this could act as support. Rejection there could support continuation of the decline.

Alternative – Structural Repair
Only a sustained break above 5,000 can return the structure to the uptrend. Until then, the upward trend remains limited and corrective in nature.

Comment

This week’s big shift is not only technical, but also macro-driven. The return of interest rate hike expectations is rapidly changing market sentiment, and gold has responded accordingly.

The price has completed a bearish liquidity cleanup and is now trading in an area where the reaction is likely to be violent. However, since the upper structure has not yet recovered, the overall trend is still bearish.

All in all, gold is in a fragile position this week and unless key resistance levels are reclaimed, the rebound is expected to face selling pressure.

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