Gold Price Slips Below $3,323: Is This Breakdown a Buying Opportunity or a Trap?
Gold is under pressure at $3,323, breaking below the trend line and the 200 period SMA on the 4 hour chart.
Quick overview
- Gold is currently under pressure at $3,323, having broken below key support levels and the 200 period SMA.
- The bearish setup indicates fading momentum, with the RSI below 40, suggesting that bullish sentiment is weakening.
- Traders are eyeing $3,309 and $3,284 as potential support levels, with a failure to hold above $3,309 likely to lead to further declines.
- For gold bulls to regain momentum, a move back above $3,342 is necessary, which would require favorable macro conditions following the Fed announcement.
Gold is under pressure at $3,323, breaking below the trend line and the 200 period SMA on the 4 hour chart. The bearish setup is showing fading momentum, RSI is below 40, a sign that bulls are running out of steam.
This comes just hours before the Fed announcement, so gold is vulnerable to macro headwinds if the Fed is hawkish or keeps rates higher for longer. US Treasury yields and a stronger dollar are still weighing on bullion, eroding its non yielding safe haven appeal.
Bears Eye $3,309 as Next Support
The breakdown below $3,342 (formerly support turned resistance) has opened the door to the next targets. Traders are now looking at $3,309 and $3,284 for a floor. A failure to hold above $3,309 could accelerate selling and pull prices to $3,257 or lower.
Volume is moderate, so investors are waiting for macro confirmation. A bounce from here isn’t out of the question, but it would need to be accompanied by strong buying momentum and macro support.
Key bearish signals:
- RSI is below 40, weak bullish commitment
- Price is below both the 200 and 50 period SMAs
- Trend line break confirms short term bearish reversal
What Bulls Need to Get Momentum Back
To reverse the trend, gold bulls need a move back above $3,342. That would not only recover lost ground but also get the price back in line with the 200 period SMA at $3,362. A close above this area could shift sentiment and bring $3,374 and $3,402 back into view.
But the path to recovery depends heavily on what the Fed says. If the Fed hints at cuts or signals caution on growth, gold could regain its safe haven glow. Until then, stay nimble and data driven.
In my experience, markets often overreact in the hours following a Fed meeting. If you’re a short term trader, keep an eye on volatility spikes. For longer term holders, today’s weakness might be a better entry if macro winds shift in gold’s favor.
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