Gold tonight watch 4410; if it can't hold, a second bottom may be coming

This Monday, gold dropped to a low of 4100. For now, it can be considered a short-term bottom, but whether this bottom is truly stable depends on whether there will be a second test of the bottom. Only after confirmation of stability can we be certain.

The 4100 level is very critical. It is not only the 10-period moving average on the monthly chart but also the lower boundary of the wide-range downward correction channel on the daily chart. At the same time, it is part of the overall ascending flag pattern. So, the decline from the previous high of 5600 to this level is a normal adjustment within the bullish trend. However, due to recent high volatility and constant news impacts, the gold price has experienced large fluctuations, with a range of nearly 1000 points up and down.

Initially, based on the previous decline from 5600 to 4400, it was estimated that after the gold price stabilized at the lower boundary of the 4100 channel, the first rebound could reach around 4809 (the 618 retracement level of the decline from 5238). After encountering resistance there, a second test of the bottom would follow, then a rebound supported by the trend to challenge the upper boundary of the oscillation channel.

But the current situation is that the rebound strength and speed are weaker than expected. So far, the rebound has only reached between 382 and the 50% retracement level, and with negative news impacting the market, after a high surge last night, it fell back. Today, it continued to decline, forming a medium-length bearish candlestick.

If the gold price cannot rally after testing the bottom and fails to produce a long lower shadow candlestick, it is likely to proceed directly to a second bottom. The next support level is around 4291, close to Tuesday’s lows of 4306-4300. This area is likely to hold and support a rebound. It’s unlikely to break below 4100 sharply, as 4100 was an extreme low caused by panic selling previously. Back then, the market didn’t react quickly, but during the second decline, everyone was prepared, so such panic selling is less likely to happen again.

Of course, if tonight the gold price can bottom out and rebound, forming a long lower shadow candlestick, it will continue to rally above Tuesday’s low of 4306, with potential to test the 10-day and 66-day moving averages, moving closer to the 50% and 618 retracement levels.

Gold Hourly Short-term Trend Analysis

At 14:00 this afternoon, gold suddenly plunged sharply, mainly due to a cargo ship loaded with Russian oil being attacked by drones. Oil prices and the dollar rose accordingly, immediately pressuring gold, which broke below the lower boundary of the white channel in the chart. The previous ascending flag pattern was also broken.

However, gold found some support around 4410. From the retracement levels of the previous upward moves from 4306-4602 (618 level) and 4100-4602 (382 level), the 4410-4420 range has support. Meanwhile, the previous lower boundary of the white channel has now become a resistance level, which has moved down to 4460. During the European session, gold has been fluctuating within this narrow range.

Tonight, focus on the 4410 support level. If it can hold and not break, and if gold can re-enter the white channel, it will continue to rebound, aiming to test the upper boundary resistance at 4520-4530. If this resistance is broken, the daily chart could target 4800.

Additionally, be prepared: if the price breaks below 4410, be ready for a second test of the bottom, with support levels at 4350, 4306-4291.