XAU/USD Shorts from 2,710 back down to 2,660

This week, my analysis focuses on the potential weakening of GOLD after its strong bullish performance last week. I’ve noticed that price is building significant trendline liquidity with multiple taps, suggesting that a reversal may be imminent to clear that liquidity.

While the bullish trend is still intact, I’m also considering a secondary scenario. In this case, I expect the price to retrace to around the 4-hour demand zone at 2,660. If the price breaks below this level, it’s likely to clear the trendline liquidity and push further down.

Confluences for GOLD Sells:

- Significant trendline liquidity below, waiting to be taken.

- A 6-hour supply zone has caused a Change of Character (CHOCH) to the downside.

- The price has also shifted structure on higher time frames.

- The point of interest (POI) is at an extreme level.

- For the bullish trend to continue, I expect a retracement back to the 2,660 region.

Note: As we’re now in mid-January, market liquidity is increasing, providing more price action to work with. This makes it likely for GOLD to continue its typical patterns. Let’s stay focused and have a great trading week!