On August 19, rising US Treasury yields lifted the opportunity cost of holding gold, while profit-taking added downward pressure. However, ongoing central bank gold purchases continue to offer medium- to long-term support, and geopolitical risks in the Middle East preserve a safe-haven cushion. With markets awaiting the Federal Reserve meeting minutes, traders remain cautious, and news-driven volatility is expected to be limited, leaving price action largely guided by technical patterns.
On the weekly chart, gold encountered concentrated selling pressure after its recent rally. The medium-term moving averages remain pointed upward, and the broader bullish structure is not yet fully broken. The RSI has retreated from overbought territory, and the MACD histogram continues to shrink, signaling a clear loss of upward momentum. The long upper shadow near the highs underscores heavy selling pressure above, suggesting the market is now in a corrective phase following the peak. The 5-week moving average serves as the critical medium-term support; a decisive break below it could open the door to a deeper pullback.
From a technical perspective, gold surged to 4436 yesterday but met firm resistance, then drifted lower throughout the session, reaching a low of 4329 in the evening. The daily candlestick closed as a large bearish candle, forming a bearish engulfing pattern. Prices have now broken below both the 5-day and 10-day moving averages, and the short-term averages have turned downward, now acting as resistance. The MACD on the daily chart shows a bearish crossover with expanding green histogram bars, and the Bollinger Bands are tilting lower. The bulls' short-term advantage has faded, and the market has shifted from a high-level consolidation to a weaker, range-bound trend. Any rebound now appears to be a technical correction within a downtrend, so traders should closely monitor whether the moving average resistance holds.
On the 4-hour chart, the price has formed an inverted V-shaped reversal from the highs, trading below both the MA20 and MA60, with short-term moving averages arranged in a bearish alignment. The MACD is in a bearish crossover, and the RSI has dropped to a neutral-to-low zone. While oversold conditions could trigger a minor technical bounce, the upside is expected to be limited. On the hourly chart, rallies have repeatedly faced resistance, so chasing dips is not advisable at this stage. It is prudent to wait for the key resistance levels to be tested before entering positions, as another leg lower could follow any rebound.
Overall, the larger timeframe retains a bullish undertone, but the short-term bias is clearly bearish, pointing to a weaker, range-bound market. Key resistance lies at 4367-4385, while support is seen at 4330-4305.
Suggested trading plan:
1. Sell on a rebound into the 4365-4380 zone, with a stop-loss above 4386 and targets at 4330-4310.
2. Buy on a pullback to the 4310-4300 area, with a stop-loss below 4295 and targets at 4330-4350.
This analysis is for reference only and does not constitute investment advice. Investors should act at their own risk.
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