The pullback before $3,400?Hello, traders
Gold has been in a clear downtrend on the 4-hour timeframe, and during one of its recent declines, it left behind a 4-hour Fair Value Gap (FVG). Price is now climbing back toward this imbalance zone, suggesting that a critical test of resistance may be approaching.
Bounce from strong support
Just a few days ago, Gold found solid footing at a strong support area, which triggered a bounce. Since then, it has been pushing higher and is now nearing the 4-hour FVG. This zone represents a significant area of imbalance left unfilled during the prior selloff, and it's highly likely that price will react once it reaches this region.
FVG and Golden Pocket
Interestingly, this FVG aligns closely with the golden pocket, which lies between 3315 and 3325. While the golden pocket sits slightly above the midpoint of the FVG, there's a good chance Gold could tap into that area before showing signs of a pullback or rejection from the FVG itself.
Target to the downside
If price fails to break above this zone and reverses, the logical target to the downside would be the 3250 level. This area has acted as a key resistance in recent sessions, and if retested from above, it could serve as a strong support base for another potential leg higher.
Target if we break above the FVG
On the other hand, if Gold manages to break cleanly through the FVG with strong volume and momentum, the path could open toward a move up to the recent highs around 3430. In that scenario, the bullish continuation would likely require sustained buying interest and increased market participation to carry through.
