Saad Ullah
⬤ Gold faced heavy selling pressure this week after being rejected from a critical resistance zone around $4,300. The rejection triggered a sharp reversal that pushed prices down to the $4,040 area, marking one of the steepest declines in recent weeks. Two consecutive bearish candles confirmed the downward momentum as the metal failed to break through the resistance block that has repeatedly capped upside attempts.
⬤ The rejection came at a zone that has acted as a ceiling multiple times before, with long upper wicks on recent candles showing aggressive selling at these levels. Gold tried to hold above the upper boundary of its previous range but couldn't maintain support, leading to further downside. The $3,891 level now stands as the next important support zone, representing a previous reaction point where buyers stepped in during earlier corrections.
⬤ The recent price action suggests gold remains in a corrective phase despite its strong rally over the past few months. Multiple attempts to push higher have failed, creating a pattern of lower highs since early November. This shift indicates weakening upside momentum and growing caution among traders. The sharp drop from resistance reflects reduced buying interest, particularly during periods of thinner market liquidity.
⬤ This rejection matters because it shows how key resistance levels can dictate short-term market direction. When prices fail repeatedly at the same area, it often shifts trader sentiment across the commodity sector, especially when volatility is high. With gold already down 4% in just two days, the market may be vulnerable to additional weakness, making support levels increasingly important for determining the next directional move.
Saad Ullah
