What stands out now is that although recession fears are still present in the macro narrative, the market is no longer reacting to gold with the same “scare buy” behavior we saw earlier this year. Investors are increasingly counting on the possibility of higher interest rates remaining longer than expected, while the Fed still lacks sufficient reasons to pivot aggressively. This environment is starting to dampen gold’s upward momentum in the medium term, making the recent rallies look more technical than structural.
From a technical perspective, gold spent last week trading within a controlled bearish range after failing to hold above the 476x-48xx and FVG demand zones. After Friday’s heavy sell-off, the price is now approaching a key confluence area around the lower uptrend line, Fibonacci support and key time frame demand near the 45xx area. This is one of the most important areas of liquidity in the current structure and will likely determine the next directional movement in the medium term.
Main scenario:
If the current support + Fibonacci + rising trend line area can hold, gold could see a short-term technical recovery early in the week and revisit the imbalance areas around 46xx-47xx. However, in the broader macro outlook, rallies are still favored as potential selling opportunities unless the bearish structure is negated in the medium term.
Alternative scenario:
If the selling pressure continues and gold breaks decisively below the lower trend line support, the market may enter a deeper distribution phase targeting lower support areas below the current price. Such a collapse would also confirm that liquidity is returning to the strength of the US dollar rather than back to safe haven assets such as gold.
Overall, gold is entering one of the most important decision zones since the crash from 476x. A reaction around current support + Fibonacci zone + trend line is likely to form the next medium-term structure while macro conditions continue to favor tighter liquidity and stronger USD flows.
LucasGrayTrading
