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Gold Technical Analysis | After ‘Plump’, Are Sellers Safe?
On April 13, gold experienced a “flash drop”, with the price falling to $4,644, a single-day drop of more than 2.3%, erasing all last week’s gains. Despite a partial recovery later, hitting $4,720.55 at 11:30 AM, is this extended decline a final challenge for buyers, or a breathing space before sellers launch their final assault?
Behind the decline: geopolitical shifts + US dollar “stealing the spotlight” The situation in the Middle East took a turn for the worse over the weekend. The “peace bubble” represented by the short ceasefire between the United States and Iran burst after the negotiations in Islamabad collapsed, and the United States immediately ordered the closure of the Strait of Hormuz. Logically, this should be a safe-haven opportunity for gold, but it is not. Instead, funds flowed into the U.S. dollar, and the U.S. dollar index once rose to 99.19. Liquidity is key, with gold emerging as the most affected safe-haven asset.
The lesson here: When uncertainty persists, the U.S. dollar becomes the primary destination for capital.
Technical Analysis: A bearish pattern has formed; any rebound is just a “coincidence”.
Daily chart: The trend has weakened significantly.
Moving average system: Gold prices have fallen below the moving average for five consecutive days and ten days, disrupting the short-term bullish structure. The 5-day moving average ($4,730) has emerged as major resistance as several rallies have stalled.
MACD indicator: The red column is close to zero, the fast line and the slow line form a sharp crossover above the zero axis, and diverge downward – obviously the bullish momentum is fading.
KDJ indicator: After the three lines formed a sharp crossover in the overbought area, the J indicator value quickly fell to the weak area below the 30 level.
Relative Strength Index (RSI) (6): It has fallen back from the overbought area above 70 to around 46, indicating that bullish sentiment in the market has declined, but the selling pressure has not completely subsided.
Bollinger Bands indicator: The price retraces from the upper boundary to the middle boundary, and the short-term moving average overlaps near the middle boundary – the market is oscillating downward, but there is no need to despair yet. 4-hour chart – Bottoming does not mean a reversal: the Bollinger Bands are narrowing and becoming flat, with an upper limit of 4820 and a lower limit of 4695. The five-day moving average (MA5) has crossed below the 10-day moving average (MA10), and prices are trading below the midline, indicating general weakness.
Although the early rebound formed a long lower shadow, indicating that buying interest is near the bottom, this is mainly a technical correction.
Gold is expected to test the 5-day moving average ($4,745) later, but this looks more like a “good opportunity” for sellers than a signal of a bullish counterattack.
My personal opinion is clear: this tone is tempting, but don’t get carried away. A rally is not a trend reversal; Instead, this is an opportunity to exit or enter a short position.
Strategy: Focus primarily on short positions, long positions are considered a secondary strategy.
Current pattern: Slight decline within the specified range; the withdrawal is nothing more than a concession from the seller.
Resistance Zone: $4730-$4745
Support range: $4665 – $4644
Key breakout level: $4,600
Specific transaction tip: Sold at current price of $4730-$4740. Stop loss at $4780. Downside targets are $4,700, $4,680 and the $4,650-$4,600 area.
Gold will always experience wild swings; what’s missing is the ability to resist the urge to seize opportunities. If you agree with the sentence “The rebound is not the bottom, and the bottom is not the rebound”, please like, comment, and follow to see where gold goes next.
