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The market is no longer “stable”. This is the stage where cash flow is distributed after the liquidity extraction process is completed.
On the D1 framework, gold prices confirmed a breakout of the medium-term bullish structure after breaking above the trendline and creating a series of clear lower highs following the previous strong rally. The recent recovery is simply a technical reaction as prices return to the equilibrium area around the 0.5-0.618 Fibonacci while retesting the old demand area that was broken – currently functioning as a supply+distribution area. The inability of prices to sustain above this area indicates that purchasing power is no longer under control and each increase only serves the ongoing distribution process.
The macro environment remains a factor adding to volatility this week. Economic data on U.S. inflation and interest rate expectations remain unclear, while military tensions have intensified again, adding to short-term psychological factors. However, similar to recent market reactions, the news does not create a trend – it is simply a catalyst for cash flow to complete its repricing and leverage liquidity. Strong selling after previous news is a clear clue: when prices don’t rise in response to good news, it’s a sign of weakness.
Currently, the 4,900-5,000 point area is the main resistance area with FVG + Fibonacci 0.618 + trendline breakout. If the price continues to reject here or fails to recover significantly from this area, the main scenario remains to continue the decline towards the low liquidity area. Areas to watch below include 4,600 → 4,530 → deeper into 4,300, where there is an area of support and liquidity that has not yet been fully tested.
Conversely, if the market can hold above 4,900 and reestablish a higher bottom structure at D1, the recovery could extend to the 5,100-5,300 area. However, this scenario is less likely in the current context and should still be considered covered within the larger downtrend structure until a clear consolidation process is shown over time.
Markets don’t reverse simply because of strong gains. The real bottom does not come from a sudden rise, but from an accumulation long enough to completely defy market expectations. Currently, this factor is not shown. Cash flow continues to benefit from the recovery phase of the distribution, and the primary trend for the April 2006-April 2010 week remains bearish if key resistance areas are not captured.
lucas gray trading co.
