Analysis of Gold Price Movement: On May 18, gold experienced an overall pattern of rallying and then declining last week. In the early part of the week, the market mainly consolidated and accumulated momentum through sideways movement. As the week approached its end, the trend turned decisively weaker, with prices closing at the session's low, resulting in a solid bearish candlestick on the weekly chart. On the daily chart, after three consecutive small bearish candles that reflected repeated choppy digestion, a substantial bearish candle emerged, leading to a significant decline. This shift has firmly established a weak trend in the market. The primary downside target now points toward the annual support level at 4236, with further potential declines approaching the previous low near the 4100 mark. Coupled with the sustained strong rebound of the U.S. dollar, which further exerts significant pressure on gold prices, the downward trajectory for the future appears clear. The overall trading strategy for this week is firmly focused on selling on rallies.
From the perspective of the four-hour chart, the market has formed a complete stepwise downward channel. The highs of each successive rebound phase have been progressively lower, declining from 4890 to 4770, indicating increasing overhead resistance. The strength of bullish rebounds continues to diminish, with the overall trend characterized by gradual declines and downward breakouts. This marks a complete shift in the medium to short-term market structure. Currently, the immediate short-term resistance is located around the middle Bollinger Band on the four-hour chart at 4620. Considering the weak opening pattern, the Asian trading session is likely to continue a weak downward rhythm, with limited room for rebound corrections.
For practical trading setups, during the Asian session, short positions can be established in batches within the range of 4540 to 4550. A unified stop-loss for overall risk management should be placed at 4570. Short-term holding targets are sequentially set at 4400 and 4236, with further potential to target the lower region around 4100 in line with the prevailing trend.
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