Gold is trading near $4,165 on October 19, caught between strong support at $4,100 and resistance at $4,200. Analyst Itsadiee_Fx suggests this pattern may be setting up a buyer trap, with repeated failures to break above $4,200 potentially leading to a sweep of the recent lows.
The precious metal is facing conflicting macroeconomic forces. September U.S. inflation rose to 3.7% year over year, pushing the 10-year Treasury yield toward 5.33% and increasing expectations for further Federal Reserve tightening. However, yields later retreated to 5.09%, preventing gold from extending its decline.
Itsadiee_Fx's analysis focuses on the one-hour XAU/USD chart. Gold has repeatedly failed to establish acceptance above $4,200, suggesting a bearish bias. The analyst expects a potential sweep below $4,066, targeting liquidity beneath the recent lows.
The analyst notes that gold's bullish momentum has been choppy, indicating buyers are struggling to gain control. If gold breaks below $4,100 and challenges the $4,066 level, a reversal could occur in the $4,060, $4,040 range, potentially leading to a recovery toward $4,200.