Peter Smith
⬤ Gold has staged a comeback after getting hammered earlier, with XAUUSD climbing back into a well-defined reaction zone on the hourly chart. The metal bounced from its previous drop and is now trading inside this technically important area. After breaking down from an earlier uptrend and selling off hard, price found its footing near a lower support zone marked as a technical bounce level.
⬤ The chart shows gold had been riding an upward trendline before peaking near higher resistance. A sharp selloff then broke through short-term support and pushed XAUUSD down into a lower band flagged for potential bounces only. From there, price kicked higher and retraced back toward the reaction zone between 5120 and 5150, where it's currently sitting tight.
⬤ Right now, price action inside the reaction zone looks indecisive. There's also a supply zone sitting above current levels, meaning any real rally would need buyers to push through and hold that resistance. If gold stabilizes and breaks cleanly above the reaction zone with a US close over 5150, the broader uptrend should stay intact. But if it can't hold this zone, the door opens for another leg down.
⬤ This setup matters because gold typically mirrors shifts in momentum and risk appetite after volatile moves. A solid close above 5150 would show buyers are back in charge following the recent slide. Failure to defend the reaction zone leaves price exposed to more downside pressure heading into next week.
Peter Smith
