Gold Weekly Outlook: Will Gold Give Back Most of Its Gains?
2025-10-25 00:07:57
Gold has experienced a volatile week, with an initial rally followed by a sharp decline to support levels near $4,000. Rising volume suggests a top may be forming, while a pullback to $3,800 is seen as a healthy normalization move after the recent parabolic rally.
The gold market initially rallied this week before reversing sharply lower. The $4,000 mark appears to be a key area of focus for the market. The trend suggests the gold market is attempting to form a temporary top, notably with a significant increase in trading volume. A look at the daily chart reveals the market is clearly attempting a downward breakout. Following Tuesday's candlestick pattern, the market has stalled, seemingly unable to regain upward momentum.
The key question is whether the market can continue to trend. A break below $4,000 would likely trigger a downward trend towards $3,800, the target level previously predicted by the ascending triangle pattern. Ultimately, this trend has strong logic. However, it's not advisable to short the market in the short term; rather, we believe that gold prices need a slight return to rationality—the previous rally has clearly been overdone.
(Source of spot gold daily chart: Yihuitong)
Nevertheless, if gold prices fall below $3,800, the market may face real problems. Gold has already experienced a period of parabolic rise, so a certain degree of correction is probably the healthiest move for the market - second only to sideways consolidation - to digest the excessive market froth accumulated in the past few months.
The gold market initially rallied this week before reversing sharply lower. The $4,000 mark appears to be a key area of focus for the market. The trend suggests the gold market is attempting to form a temporary top, notably with a significant increase in trading volume. A look at the daily chart reveals the market is clearly attempting a downward breakout. Following Tuesday's candlestick pattern, the market has stalled, seemingly unable to regain upward momentum.
The key question is whether the market can continue to trend. A break below $4,000 would likely trigger a downward trend towards $3,800, the target level previously predicted by the ascending triangle pattern. Ultimately, this trend has strong logic. However, it's not advisable to short the market in the short term; rather, we believe that gold prices need a slight return to rationality—the previous rally has clearly been overdone.
(Source of spot gold daily chart: Yihuitong)
Nevertheless, if gold prices fall below $3,800, the market may face real problems. Gold has already experienced a period of parabolic rise, so a certain degree of correction is probably the healthiest move for the market - second only to sideways consolidation - to digest the excessive market froth accumulated in the past few months.
- Risk Warning and Disclaimer
- The market involves risk, and trading may not be suitable for all investors. This article is for reference only and does not constitute personal investment advice, nor does it take into account certain users’ specific investment objectives, financial situation, or other needs. Any investment decisions made based on this information are at your own risk.
