Gold market analysis

"Gold Prices Stabilize at 3646, Bounce Expected to Continue" 9:00 19/9/2025 Completed 

Yesterday, the spot gold price hit a new high and then closed with a bearish engulfing candlestick, a pattern that last occurred on October 31, 2024. On that day, the spot gold price peaked at $2,790.41 and then reversed in a single day, closing lower at $2,743.80 in a bearish engulfing pattern. After that, the gold price fluctuated and declined, eventually bottoming out at $2,536.91 on November 14. On the same day, it rebounded sharply with a long-tailed hammer candlestick, closing at $2,566.19. The next day, after a slight consolidation, it resumed its upward momentum. Although the gold price hit a high of $2,721.43 on November 25 and closed with a bearish engulfing candlestick, this was only a rebound high and not the top of an uptrend. 

The midline is expected to decline by more than 250 US dollars. 

Taking the gold price's drop from a high of $2,790.41 on October 31 last year to a low of $2,536.91 on November 14 as an example, it fell by a maximum of $253.5 or nearly 9.1% over 11 trading days. On the day of the high's reversal, the maximum decline was $58.76. In contrast, after reaching a peak yesterday, the gold price dropped by a maximum of only $79.61 within two trading days, with a single-day maximum decline of $62.3. The overbought condition was also more severe. Therefore, unless gold market investors believe that the Federal Reserve still has a 50 basis point interest rate cut space this year and continue to view gold as a safe-haven asset, otherwise, from a time perspective, the gold price's correction wave has just begun, and the cumulative decline is bound to exceed $253.5! 

The short-term decline target is $3,610. 

In the short term, from the hourly chart, after the gold price dropped sharply with a large bearish candle in the early hours of Thursday, two major rebounds were both blocked at $3,672 and $3,673 respectively. The rebound amplitude was only slightly over 38.2% of the large bearish candle, still a bit away from the 50% level at $3,676.88. Therefore, the main resistance zone for the gold price in the future can be considered as $3,670 to $3,675. Another point to note is that after the gold price broke through the lowest point of the aforementioned large bearish candle at $3,646 in New York last night, it rebounded twice to that level but was blocked and fell back. Therefore, this level can be regarded as the main short-term resistance. That is to say, the gold price must stand firm above this level before it can be expected to challenge the resistance zone of $3,670 to $3,675. 

Using the TD line to measure the hourly chart trend, the big bearish candle on Thursday morning broke through the TD ascending track, and the measured decline target is exactly at the 225-degree angle of the Gann Square at $3,610. In other words, the gold price will remain in a range of $3,610 to $3,660 for a period of time. 

The above content is for reference only and does not constitute investment advice. 

MTF Special Analyst Zheng Guangfu