I have been staring at the same chart for three days now. Thursday night in Singapore — EU session winding down, NY about to open — and gold is sitting below $4,000, looking heavy.
I will be honest: I have been short since Monday. Not a big position — 2% risk, standard. But I added a second unit yesterday when we broke $3,980 clean, and right now I am sitting on a small floating profit, waiting for tonight's Core PCE number to decide the next leg.
Here is what I am seeing, what I am trading, and where I think this goes.
The Setup That Has Been Building Since Sunday Night
The bearish structure was already there when Asia opened on Monday. Four-hour chart — 5MA pressing down like a steamroller, price respecting it tick by tick. Hourly Bollinger Bands widening to the downside. Every bounce got sold. Not just sold — sold aggressively, with conviction.
I have seen this pattern before. It usually means institutional distribution — the big players are lightening longs and adding shorts, and they are using every small rally to do it. When the 4H 5MA acts as resistance for three consecutive candle closes, I stop looking for longs altogether. I just look for entries on the short side.
That is exactly what we got this week. Monday and Tuesday were slow grinds lower. Wednesday was the acceleration — gold kissed $3,960, bounced briefly, then closed right back near the lows. Textbook downtrend behavior.
The Levels That Matter Right Now
$4,000–$4,016 is the resistance zone. I do not care about the round number itself — what I care about is that every attempt to reclaim it this week has failed. Monday's high was $4,012. Tuesday's high $4,008. Wednesday $4,005. Each rally gets weaker. That is a market telling you sellers are waiting at every level.
If price pulls back to $4,000–$4,010 in the next session, that is where I would look to add shorts. Tight stop above $4,025. The risk-reward works — 15 pips of risk for a potential 50-pip move back toward $3,960.
$3,960 is the first downside target. We tagged it Wednesday. If we break it with conviction — especially if Core PCE surprises hot — I expect $3,925 next. Below that, $3,880 comes into play. That is where the daily chart shows a major structural support from early June.
$4,040 is the line in the sand. If price reclaims $4,040 on strong volume, the bearish thesis weakens. But right now, that level feels a long way off. It used to be support. Now it is resistance. That alone tells you the trend has shifted.
What I Am Watching Tonight — Core PCE
The US Core PCE price index comes out tonight — the Fed's preferred inflation gauge. Expectations are for a year-over-year print of 3.4%, up from 3.2% last month.
Here is the thing about PCE and gold. If the number comes in hot (above 3.4%), the market will immediately price in a more hawkish Fed. The dollar will bid. Gold will sell off. I would not be surprised to see a $30–$50 drop in the hour after the release.
If it comes in at expectations or below — say 3.3% or lower — we could see a short-covering bounce. But I do not think it changes the broader trend. The dollar is strong, the manufacturing data is solid, and the new Fed chair has already signaled his bias. One soft PCE print does not undo that.
I am keeping my shorts on through the release. Position sized for a 50-pip adverse move. If the dollar rips, I add. If gold bounces hard, I take partial profits and wait for the resistance to re-test before re-entering.
The Bigger Picture No One Is Talking About
Everyone is focused on the Fed and PCE. Rightfully so. But there is something else happening in the background that I think matters more for gold over the next few weeks.
The US manufacturing sector is showing real strength — PMI numbers have been solid. But employment data is softening. That divergence creates a weird environment where the economy looks strong enough to keep rates high, but not strong enough to justify hiring. That is exactly the kind of ambiguity that keeps gold under pressure without crashing it.
Meanwhile, the Congress resolution limiting military action against Iran removed a big chunk of geopolitical premium from gold. Less uncertainty = less reason to hold the safe haven.
Combine those with a hawkish Fed chair who has already signaled two potential hikes before early 2027, and the path of least resistance for gold is lower.
How I Am Trading This — My Actual Plan
I do not like to get fancy in a downtrend. Here is exactly what I am doing:
- Core position: Short from $4,020 and $3,990 entries, targeting $3,880. Stop on the combined position at $4,040.
- If PCE is hot: Add a third unit on a break below $3,960 with a tight $10 stop.
- If PCE is soft: Take profit on half the position into a bounce toward $4,000, then wait for the resistance to hold before re-entering.
- If gold reclaims $4,040: Close everything. The thesis is wrong. Reassess.
Simple. No indicators. Just levels, risk management, and a bias that comes from reading the structure rather than hoping for a reversal.
A student asked me this morning: "Lin, are you sure it is going lower?"
I told him: I am not sure of anything. But I am trading what the chart is showing me, and right now the chart is showing me lower highs and lower lows. I do not need certainty. I just need a process that keeps me in the game when I am wrong and lets me press when I am right.
That is the whole secret. There is no other one.