Although sentiment going into Monday is broadly bullish, driven by escalating geopolitical tension and anticipation of a breakout, XAU/USD may still open with a brief pullback, not because traders are ignoring the situation, but because markets often test the conviction of retail and early-positioned bulls before making a decisive move.
When gold opens during the Asian session, a wave of participants—already leaning bullish—may rush in with early long entries. However, smart money and institutional traders often prefer to buy on value, not at the highs. So instead of chasing price above $3,368–$3,370 immediately, they may allow or even trigger a short-term flush—pushing price down to retest key support at $3,343.88. This level aligns with prior structure and psychological comfort: it offers an opportunity for a cleaner re-entry, or for those who missed the move on Friday to establish positions.
This decline isn't a breakdown, but a strategic sweep of weak hands and stop losses—a classic fake-out move. Once that level is tagged and buyers step back in, the market quickly finds footing. With news-driven urgency and broader sentiment tilting toward risk aversion, gold recovers fast. By late Asia or early London hours, price grinds back toward the $3,385–$3,390 zone, right below the known bullish breakout ceiling.
This kind of "bearish tap then bullish reclaim" sequence builds the technical base necessary for a stronger breakout attempt later in the session—shaking out early longs and inviting smarter buying near support rather than resistance.
When gold opens during the Asian session, a wave of participants—already leaning bullish—may rush in with early long entries. However, smart money and institutional traders often prefer to buy on value, not at the highs. So instead of chasing price above $3,368–$3,370 immediately, they may allow or even trigger a short-term flush—pushing price down to retest key support at $3,343.88. This level aligns with prior structure and psychological comfort: it offers an opportunity for a cleaner re-entry, or for those who missed the move on Friday to establish positions.
This decline isn't a breakdown, but a strategic sweep of weak hands and stop losses—a classic fake-out move. Once that level is tagged and buyers step back in, the market quickly finds footing. With news-driven urgency and broader sentiment tilting toward risk aversion, gold recovers fast. By late Asia or early London hours, price grinds back toward the $3,385–$3,390 zone, right below the known bullish breakout ceiling.
This kind of "bearish tap then bullish reclaim" sequence builds the technical base necessary for a stronger breakout attempt later in the session—shaking out early longs and inviting smarter buying near support rather than resistance.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.