$XAU Gold Thesis
While the majority of traders are turning bearish after the recent 3% drop, I believe the market may be setting up for a short squeeze rather than an immediate collapse.
Price is currently testing a major demand zone around $4,278-$4,300, an area that has historically attracted buyers. At the same time, a significant pool of untouched liquidity remains above $4,618, making it an attractive target if support holds.
My expectation is a relief rally from the current region toward $4,618 first. If momentum returns, a retest of the descending trendline could follow, where even more liquidity has built up over the past few weeks.
As long as gold remains above the $4,278 support area, I'm not interested in chasing shorts. Instead, I'm watching for confirmation that buyers are stepping back in.
Key Levels:
Support: $4,278-$4,300
First Target: $4,521
Major Resistance: Descending Trendline
The next few sessions should reveal whether this breakdown is the start of a larger bear trend or simply a liquidity sweep before a recovery.
#XAUUSD #GOLD #priceaction #MarketAnalysis
