Gold in the Agony of Uncertainty: Ascending Channel Broken, Awaiting the $4,235 Floor

Gold corrected from the $4,700 resistance last week and, after reacting to the $4,283 level, staged a modest recovery. On the weekly timeframe, price sits in the middle of a wide range ($3,900 to $5,600) and has reclaimed the 9-week moving average. On the daily timeframe, the previous ascending channel has been broken, and the chart has entered a minor descending range. 

The most probable floor for this range is the $4,235 level (FL in the RTM framework), with an extension zone of $4,136-$4,153 should the correction deepen. On the 4-hour timeframe, range-bound oscillation between the floor and ceiling of the minor range ($4,235 to $4,699) is expected, with a midpoint of $4,440-$4,460. Until a breakout occurs, the trading strategy will remain range-bound and swing-oriented.

Key Points

• Weekly Range: Price is oscillating between $3,900 and $5,600, with the midpoint of $4,699 acting as the ceiling of the current minor range.
• Daily Ascending Channel Breakdown: The breach of the prior ascending channel warns of a shift in the intermediate trend to a neutral-to-bearish phase.
• Probable Floor at $4,235: The FL level in the RTM framework and the first point of contact with the Brook’s channel floor are considered the primary downside target.
• Risky Extension to $4,153: The untapped liquidity zone of $4,136-$4,153 keeps the possibility of a deeper correction alive.
• Range Midpoint at $4,440-$4,460: This zone plays a decisive role in short-term behavior; below it, it acts as resistance, and above it, as support.

Weekly Wide Range: Uncertainty Between Two Moving Averages

On the weekly timeframe, gold is situated in the middle of a very broad trading range ($3,900-$5,600). Price corrected from the $4,699 midpoint and pulled back toward the 9-week exponential moving average. Although this support was briefly lost, the market quickly reclaimed it.

So, until the $4,699 midpoint is broken to the upside, no new rally will begin; and until the 9-week average is broken to the downside, no sharp drop will occur. This condition has given rise to a phase of uncertainty and a narrower range in the short term.

Daily Ascending Channel Breakdown: Downside Target of $4,235 Awaits

In previous analyses, an ascending channel was identified alongside an FL level at $4,235 (in the RTM framework). The chart was expected to oscillate within this channel for a while, but ultimately the channel was broken to the downside. This breakdown confirms entry into a minor descending range. The ceiling of this minor range is the same $4,699 level (the weekly range midpoint), and the most probable floor is the $4,235 level. Additionally, an untapped liquidity zone in the $4,136-$4,153 area keeps the possibility of an extended floor on the table. Gold is expected to oscillate between this ceiling and floor for some time.

4-Hour Minor Range Oscillation: The $4,460 Midpoint as the Key to Direction

On the 4-hour timeframe, the exit from the ascending channel is complete, and the trading approach must align with the new range-bound cycle. Near the range floor ($4,235), long entries are permissible, and near the ceiling ($4,699), short entries are permissible, but only with candlestick confirmation. The range midpoint, in the $4,440-$4,460 zone, plays a pivotal role: as long as price remains below the midpoint, this area acts as resistance; if price crosses above it, it turns into support. This oscillatory cycle will continue until a breakout occurs, after which we can expect a move at least equal to half the range height in the direction of the breakout.

Main Scenarios for the Week Ahead

Final Summary

Gold is trapped in a short-term range between $4,235 and $4,699, and until one of these two levels is decisively broken, no clear trend exists. The technical bias leans toward the downside, as the daily ascending channel has been lost and the $4,235 target remains intact. However, any breakout above $4,699 could shift the outlook to the upside. In the current environment, range-bound swing trading, adhering to midpoint rules and candlestick confirmation, remains the most logical approach.