On June 16th, gold opened higher and continued to rise, breaking through key resistance levels before encountering selling pressure around 4370 during the US session. It subsequently pulled back, closing just above 4300, forming a daily candle with a long upper shadow. The price action indicates the market is approaching a critical resistance zone and has retreated from highs. If there is no breakout today, attention will remain on a potential downward consolidation and correction. Therefore, the key area to watch above is 4350-70. A breakout above this zone could target the 4400-4450-4500 region. If it fails to break, focus will shift to a retest of the short-term moving averages. The primary support below is the 4295-80 area, with the major support zone at 4220-4200, which also represents the recent gap-up level. As long as this support holds, the bullish outlook remains intact.
Looking at the hourly chart, after the strong gap-up opening yesterday, the price consolidated above the 4300 level. This move, a dip and subsequent recovery, has formed a V-shaped pattern, creating a potential 'golden pit'. The question is whether this is a mere rebound or a trend reversal. From a technical perspective, yesterday's price reached near the trendline and a key resistance-turned-support level around 4370 before pulling back, initiating a minor correction. Today, the initial focus is on the support zone of 4300-4270. If this holds and the price breaks upward, it could potentially form an inverse head and shoulders pattern. Short-term resistance lies at 4330, followed by the 4350 area. In summary, if the recent highs are not breached, trading will likely revolve around key levels for consolidation. A breakout should be followed with a trend-following position addition.
Trading recommendations: Consider long positions near the 4290 support area, with a stop loss placed below 4270, targeting 4330-4350. Hold the position if the breakout continues. If the price unexpectedly drops to the 4220-4200 zone, long positions can still be considered. For short-term trades, consider short positions near the 4350 or 4500 resistance levels, ensuring to place tight stop-losses, targeting 30-50 points. Specific execution should be based on real-time market conditions.
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