Gold (XAUUSD) Enters Correction Phase Amidst Bullish Long-term Trend

Market Analysis – May 9

Gold has undergone a notable transformation this year, transitioning from a period of price stagnation to a robust uptrend. The breakout above the critical level of 2074.0 marked a significant turning point, fueling a sustained ascent in price. However, the recent emergence of a correction phase in the gold market suggests a temporary pause in this upward trajectory, with indications of waning bullish momentum.

Key Levels for Gold:

Demand Levels: 2223.0, 2074.0, 1976.9
Supply Levels: 2431.0, 2500.0, 2600.0

Gold Long-term Trend: Bullish

Despite the current correction, the long-term outlook for gold remains bullish. Examination of the daily chart reveals a series of major lows interconnected by a bullish trend line, providing insights for potential entry points for long positions. Traders may find opportunities to establish forex signals by monitoring the upcoming test of this trendline.

The placement of the Parabolic SAR (Stop and Reverse) points above the candlesticks signals an impending price decline. However, it’s noteworthy that the last significant demand zone at 2223.0 remains unbreached, suggesting that the current downturn in price is likely a retracement within the broader bullish trend.

Gold Short-term Trend: Ranging

In contrast to the bullish long-term perspective, the short-term trend for gold appears bearish. A closer examination of the daily chart reveals a completed bearish reversal, particularly evident in the 4-hour timeframe. Within this shorter timeframe, gold is exhibiting a consolidation pattern, confined within the price range of 2355.0 to 2291.0. This consolidation may persist on the daily chart, prolonging the corrective phase.

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