XAU/USD (Gold) Deep Discovery & Trading Plan

Date: September 26, 2025

Current Price: $3,766.855

1. Market Overview & Technical Context

Gold (XAU/USD) is currently trading near $3,766.85, just below its recent record highs around $3,791. The metal has experienced a strong rally since August, gaining approximately 14.5%, driven by expectations of US Federal Reserve rate cuts and safe-haven demand amid inflation and geopolitical concerns.

Technically, gold is in a strong uptrend on the weekly timeframe, potentially completing the final stages of a Wave 5 Elliott impulse. Key Fibonacci extensions place immediate resistance at $3,750 (161.8% extension) and a major target at $4,050 (200% extension). The price is currently testing a critical resistance zone between $3,782 and $3,812, where multiple technical indicators converge.

Momentum indicators show mixed signals: the RSI on monthly charts is extremely overbought (~85-90) with bearish divergence, suggesting potential exhaustion, while short-term RSI is neutral. The 10-Day moving average near $3,699 and 20-Day near $3,633 are important support levels to watch for potential pullbacks or consolidation.

2. Latest Market News Specific to Gold

Gold's rally is supported by declining US Treasury yields (10-year at 4.114%) and dovish Federal Reserve commentary emphasizing "two-sided risks" to the economy.
Upcoming US PCE inflation data (due Friday) is a key event; stronger inflation could strengthen the dollar and pressure gold, while weaker data may support gold prices.
ETF demand remains robust, with significant inflows in 2025, indicating strong institutional interest.
Geopolitical tensions and tariff-driven inflation concerns continue to underpin gold's safe-haven appeal.
Market sentiment is cautiously bullish but tempered by signs of slowing momentum and potential profit-taking in Q4.

3. Technical Analysis Summary

Key Resistance Levels	Key Support Levels
$3,812 (upper resistance zone) $3,850 $4,050 (major target)	$3,699 (10-Day MA) $3,633 (20-Day MA) $3,600 (pullback zone) $3,400 (previous resistance turned support)

Indicators & Patterns

RSI: Monthly RSI is extremely overbought with bearish divergence; short-term RSI is neutral.
Elliott Wave: Likely in final Wave 5; potential for near-term correction after reaching resistance.
Moving Averages: All major EMAs and SMAs (10, 20, 50, 100, 200) are in bullish alignment.
Candlestick Patterns: Recent candles show upper wicks indicating selling pressure near highs.
Order Book Sentiment: Short-term trader sentiment is bearish, but smart money remains bullish.

4. Trading Plan for Next 1-3 Days

            Primary Scenario: Cautious Bullish Continuation with Pullback Opportunity
            Entry: Consider long positions on dips to $3,700 - $3,720 with confirmation of support holding.
Targets: $3,782 - $3,812 resistance zone for partial profit-taking; extended target $3,850 if breakout occurs.
Stop Loss: Below $3,680 to limit downside risk.
Rationale: Momentum slowing but trend intact; dip buyers likely to defend key support levels.

        

            Alternative Scenario: Short-Term Pullback / Correction
            Trigger: Failure to hold $3,700 support or close below 10-Day MA ($3,699).
Entry: Short positions on retest of $3,700 or breakdown confirmation.
Targets: $3,633 (20-Day MA), then $3,600 - $3,550 support zone.
Stop Loss: Above $3,720 to protect against false breakdowns.
Rationale: Overbought conditions and bearish RSI divergence suggest risk of correction.

        

Risk Management

Limit position size to maximum 2% portfolio risk per trade.
Use tight stops given the extended nature of the rally and potential volatility around key economic data.
Monitor the upcoming PCE inflation report closely as it may trigger directional moves.
Consider scaling in/out of positions to manage risk and capture potential volatility.

5. Conclusion

Gold remains in a strong uptrend near record highs, supported by dovish Fed expectations, low real yields, and safe-haven demand. However, technical indicators warn of overbought conditions and slowing momentum, suggesting a cautious approach. The next 1-3 days are likely to see consolidation or a mild pullback before any decisive breakout or correction.

Traders should watch the $3,700 support level closely and be prepared for increased volatility around the upcoming US PCE inflation data. A break above $3,812 could open the path to new highs near $3,850-$4,050, while a failure to hold support may lead to a corrective phase toward $3,600-$3,550.

Maintaining disciplined risk management and monitoring key technical and fundamental triggers will be essential for navigating this critical juncture in gold's price action.