The Great Way of Nature: XAU Evening Review | After a daily high of 4497.72, it fell into a state of volume contraction and stagnation. Bulls need to be wary of sudden crashes, and profits from long positions should be locked in at Luodai for safety!
The daily gold trend fully conforms to the characteristics of volume contraction and stagnation: after reaching a peak of 4497.72, trading volume quickly shrank, and prices oscillated narrowly in the range of 4484-4490, failing to effectively break through the previous high and not showing a deep pullback. The typical stagnation pattern indicates a risk accumulation of selling pressure in the short term. Technically, although the 7-day and 20-day moving averages form support, the deviation between the price and the moving averages remains high, and the demand for overbought correction has not been fully released. Once the trading volume continues to be sluggish, gold prices can easily experience a rapid drop.
Tonight, the U.S. third quarter GDP and core PCE data will be released. Against the backdrop of volume contraction and stagnation, any bearish signals from the data could trigger a crash. Even if the data is slightly bullish, it is difficult to change the technical pullback demand caused by the divergence of volume and price. Currently, the resistance at 4497.72 has formed strong pressure, and the support below is initially seen at 4480-4483. If a crash occurs, gold prices may quickly probe the range of 4470-4475, with strong support still at 4450-4452.
In terms of operations, short-term long positions can be fully exited to lock in profits after entering at 4470-4475; for medium to long-term long positions, it is recommended to reduce holdings by 50%-70%, while moving the stop loss for the remaining base position up to below 4470, thus preserving existing gains and not giving up the opportunity for a medium-term bullish trend. The focus for short positions tonight is around the 4500-4520 range.
During the phase of volume contraction and stagnation, market sentiment is fragile, and it is essential to strictly control positions. Do not harbor a lucky mentality waiting for a breakout, and avoid the risk of profit reversal brought about by sudden crashes! $XAU
