Gold Prices Drop Below $4,700: Will Bears Rejoice or Bulls in Trap? Don’t panic, the price range has not been broken!

In the past two days, the gold market has fluctuated violently.

On Wednesday (April 22), the price of gold suddenly fell by more than 2%, breaking through the important psychological level of $4,700 and hitting a low of $4,668. Many long positions were immediately trapped, while those who attempted to open short positions faced a rapid rally to $4,745, leaving those short to stay at the top of the market. In this type of market, whether prices rise or fall, losing money is really stressful.

Almost all the investors who consulted me in the past few days lamented: They originally thought there would be a correction, but their short positions were blown up almost as soon as they entered the market; later, they finally dared to buy, only to find that they bought the highest price. Caught in volatile buying and selling positions, they are constantly exposed to wild swings. Frankly speaking, in such a market, the shortcomings do not lie in everyone’s technology, but in the speed of market fluctuations and the bad luck that befalls them – these four words are not enough to express the bitterness of the situation. But I want to say: If you come, I’m willing to help. The road to investing is anything but easy. If you’re serious, I won’t be complacent. I wish you success and profit from now on. I am not only your mentor, but also a close friend you can rely on.

Back to the market: This decline is not a trend reversal; don’t let emotion cloud your judgment.

Why did the price of gold fall yesterday? On the surface, this is due to better-than-expected U.S. retail sales data in March, as well as the hawkish signal from Federal Reserve nominee Warsh – “not committed to cutting interest rates, independent of the White House” – which made the dollar stronger and directly depressed the price of gold. In addition, the geopolitical situation has not worsened recently, causing some safe-haven funds to withdraw funds, thus putting pressure on gold prices lower.

But everyone should realize one thing: this is just a temporary correction, not the beginning of a downtrend.

Technically, gold is still within the wide range of 4900-4650 that I have repeatedly emphasized. It fell to 4668 points yesterday, hitting the lower limit of the trading range, and then quickly rebounded to 4745 points, recovering nearly half of the loss. What does this move mean? Suggesting that buying pressure remains strong, buyers are not collapsing; they are simply fluctuations in market forces.

Daily Chart: Yesterday’s trading ended with a bearish candle with a long lower shadow, forming a bearish engulfing pattern. The price has actually fallen below the 5-day and 10-day moving averages, and the 5-day and 10-day moving averages are about to cross downward, indicating short-term weakness. MACD continues to shrink, the DIFF line shows a downward trend, and KDJ has pulled back from the overbought zone, indicating that the upward momentum is weak and the callback signal is obvious.

However, don’t ignore the fact that yesterday’s drop to 4668 points followed by a rapid recovery suggests there is strong support in this area. The daily chart is still in a high consolidation pattern, and the overall trend has not turned bearish.

Four-hour chart: Bollinger Bands are expanding downward. After breaking through the lower rail, the price rebounded and is currently stable near the lower rail. A correction is required after an oversold condition occurs. Bullish resistance levels to watch are 4780-4800, while bearish support levels are 4700-4680.

Taken together, today’s gold price will most likely stabilize within the 4780-4680 range. There is no need to worry about yesterday’s sharp price drop, and there is no need to rush to buy on the rebound. A short-term strategy is to buy when prices are low and sell when prices are high, trading within that range.

Day trading strategies:

Sell ​​on rise: It is recommended to open a position in the 4750-4760 range, with a stop loss order at 4781 and a target price between 4700-4680.

Buy on dips: If the price drops to the 4700-4690 range and stabilizes, it is recommended to buy in a small amount, with a stop loss order set at 4675 and a target price between 4760-4780.

Remember: Don’t rush into the market until the price range is broken. When the trend is unclear, trading less means fewer mistakes; be patient and wait for signals.

I write this article not to prove my worth, but to say to those who are losing money, frustrated, and anxious: You are not alone in this battle. The market is cruel, but some people will survive. Why can’t you be one of them?

If you agree with my point of view, or you have suffered a loss in this market and want to find someone to talk to, please like and comment below. Every like from you encourages me to keep posting.

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